SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934. For the quarterly period ended September 30, 2003.

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934.
    For the Transition period from                        to
                                      -------------------    -------------------

Commission File Number:  0-19671

                             LASERSIGHT INCORPORATED
                             -----------------------
             (Exact name of registrant as specified in its charter)


         Delaware                                            65-0273162
--------------------------                                   ----------
(State of Incorporation)                       (IRS Employer Identification No.)



             6848 Stapoint Court, Winter Park, Florida        32792
            -------------------------------------------------------
           (Address of principal executive offices)       (Zip Code)

                                 (407) 678-9900
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes           No X
    -----       -----

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act

 Yes          No X
    -----       -----

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes   X       No
    -----       -----

         The number of shares of the registrant's common stock outstanding as of
September 30, 2003 is 27,841,941. As detailed herein, the Company filed Chapter
11 bankruptcy on September 5, 2003. As a result of the bankruptcy, the company
canceled these shares and issued 9,997,195 new shares on June 30, 2004. As of
November 30, 2004, there are 9,997,195 common shares outstanding.

LASERSIGHT INCORPORATED AND SUBSIDIARIES

EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE DISCUSSION IN THIS
REPORT CONTAINS FORWARD-LOOKING STATEMENTS (WITHIN THE MEANING OF SECTION 21E OF

<PAGE>

THE SECURITIES EXCHANGE ACT OF 1934) THAT INVOLVE RISKS AND UNCERTAINTIES.
LASERSIGHT'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED HERE.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, THOSE DISCUSSED IN THE SECTIONS ENTITLED "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - RISK FACTORS AND
UNCERTAINTIES" IN THIS REPORT AND IN LASERSIGHT'S ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 2002. LASERSIGHT UNDERTAKES NO OBLIGATION TO UPDATE
ANY SUCH FACTORS OR TO PUBLICLY ANNOUNCE THE RESULTS OF ANY REVISIONS TO ANY OF
THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY FUTURE EVENTS OR
DEVELOPMENTS.


<TABLE>
<CAPTION>

                                      INDEX
<S>             <C>                                                                                <C>


                                                                                                    PAGE
PART I.    FINANCIAL INFORMATION

           Item 1.     Condensed Consolidated Financial Statements

                       Condensed  Consolidated  Balance  Sheets as of September  30, 2003 and
                       December 31, 2002                                                               3

                       Condensed  Consolidated  Statements of Operations  for the Three Month
                       Periods and Nine Month Periods Ended September 30, 2003 and 2002                4

                       Condensed  Consolidated  Statements  of Cash  Flows for the Nine Month
                       Periods and Ended September 30, 2003 and 2002                                   5

                       Notes to Condensed Consolidated Financial Statements                            6



           Item 2.     Management's  Discussion  and  Analysis  of  Financial  Condition  and
                       Results of Operations                                                          15

           Item 3.     Quantitative and Qualitative Disclosures about Market Risk
                                                                                                      36

           Item 4.     Controls and Procedures                                                        36

PART II.   OTHER INFORMATION

           Item 1.     Legal Proceedings                                                              36

           Item 2.     Unregistered Sales Of Equity Securities And Use Of Proceeds                    37

           Item 3.     Defaults Upon Senior Securities                                                37

           Item 4.     Submission of Matters to a Vote of Security Holders                            37

           Item 5.     Other Information                                                              37

           Item 6.     Exhibits                                                                       37

</TABLE>


                                  Page 2 of 38
<PAGE>


                         PART I - FINANCIAL INFORMATION
ITEM 1 -  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>


                    LASERSIGHT INCORPORATED AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<S>                                                                             <C>              <C>

                                                                                September 30,     December 31,
             ASSETS                                                                      2003             2002
                                                                                -------------    -------------
Current assets:                                                                   (Unaudited)
  Cash and cash equivalents .................................................   $     224,631    $   1,065,778
  Accounts receivable - trade, net ..........................................          23,445        3,811,065
  Notes receivable - current portion, net ...................................         206,246        1,763,106
  Inventories ...............................................................       4,067,406        8,928,099
  Deferred tax assets .......................................................               -           28,850
  Other current assets ......................................................         292,188          593,842
                                                                                -------------    -------------
                                          Total Current Assets ..............       4,813,916       16,190,740
Notes receivable, less current portion, net .................................               -        1,020,731
Property and equipment, net .................................................         137,584          444,049
Patents and acquired intangibles, net .......................................         491,714        4,828,725
Other assets, net ...........................................................         424,633          623,376
                                                                                -------------    -------------
                                                                                $   5,867,847    $  23,107,621
                                                                                =============    =============
        LIABILITIES AND STOCKHOLDERS' EQUITY (Deficit)

Current liabilities not subject to compromise(2003) :
  Note payable, net of unamortized discount of zero and $12,246 at
  September 30, 2003 and December 31, 2002, respectively ....................   $   1,849,423    $   2,077,754
  Accounts payable ..........................................................         178,902        2,755,358
  Accrued expenses ..........................................................         530,011        1,993,993
  Accrued license fees ......................................................          22,769        1,504,400
  Accrued warranty ..........................................................          76,000        1,667,656
  Accrued commissions .......................................................               -        1,594,634
  Deferred revenue ..........................................................       1,039,240        1,657,352
                                                                                -------------    -------------
                                          Total Current Liabilities .........       3,696,345       13,251,147
Liabilities subject to compromise (a) .......................................      15,616,134                -
Accrued expenses, less current portion ......................................               -          187,449
Deferred royalty revenue ....................................................       5,037,511        5,741,941
Deferred income taxes .......................................................               -           28,850
Commitments and contingencies
Stockholders' equity (deficit):
  Convertible preferred stock, par value $.001 per share; authorized 10,000,000
  shares: Series H - 9,280,647 issued and outstanding at Setptember 30, 2003
  and December 31, 2002, respectively ........................................          9,281            9,281

  Common stock - par value $.001 per share; authorized 100,000,000 shares;
  27,987,141 shares issued at September 30, 2003 and December 31, 2002. ......         27,987           27,987


  Additional paid-in capital ................................................     103,801,064      103,796,812
  Stock subscription receivable .............................................               -          (32,336)
  Accumulated deficit .......................................................    (121,777,828)     (99,360,863)
  Less treasury stock, at cost;  145,200 common shares at September 30, 2003
  and December 31, 2002 .....................................................        (542,647)        (542,647)
                                                                                -------------    -------------
                                                                                  (18,482,143)       3,898,234
                                                                                -------------    -------------
                                                                                $   5,867,847    $  23,107,621
                                                                                =============    =============
(a) Liabilities subject to compromise consist of the following:
     Accounts Payable .......................................................       2,905,814
     Accrued expenses .......................................................       5,864,191
     Accrued warranty .......................................................       6,125,730
     Other liabilities ......................................................         720,399
                                                                                -------------
                                                                                   15,616,134
                                                                                =============

</TABLE>

   See accompanying notes to the condensed consolidated financial statements.





                                  Page 3 of 38
<PAGE>

<TABLE>
<CAPTION>

                    LASERSIGHT INCORPORATED AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<S>                                                <C>             <C>             <C>             <C>
                                                            (Unaudited)                    (Unaudited)
                                                        Three Months Ended              Nine Months Ended
                                                           September 30,                   September 30,
                                                    ------------------------------ ------------------------------
                                                       2003             2002            2003            2002
                                                    ------------------------------ ------------------------------
Revenues, net:
    Products ...................................   $  1,615,725    $  2,526,171    $  5,297,522    $  5,752,087
    Royalties ..................................        234,810         224,096         704,430         867,009
                                                   ------------    ------------    ------------    ------------
                                                      1,850,535       2,750,267       6,001,952       6,619,096
Cost of revenues:
    Product cost ...............................        510,221       1,417,219       6,395,484       3,851,799
                                                   ------------    ------------    ------------    ------------
Gross profit (loss) ............................      1,340,314       1,333,048        (393,532)      2,767,297

Research and development and regulatory expenses         61,298         203,288         354,597       1,138,500

Other general and administrative expenses ......      2,154,653       2,489,047       8,036,266      10,622,854
Selling-related expenses .......................      3,342,737         764,668       4,546,805       2,226,855
Allowed warranty Claims.........................      4,640,319               -       4,640,319               -
Amortization of intangibles ....................          8,286         115,059         238,404         345,177
Impairment of patents .........................              -               -        4,098,607               -
                                                   ------------    ------------    ------------    ------------
                                                     10,145,995       3,368,774      21,560,401      13,194,886
                                                   ------------    ------------    ------------    ------------

Loss from operations ...........................     (8,866,979)     (2,239,014)    (22,308,530)    (11,566,089)
Other income and expenses:
Interest and other income ......................         10,422         69,077          48,393         215,018
Litigation settlement ..........................              -        (140,000)              -        (140,000)
Interest expense ...............................        (58,908)       (141,653)       (214,535)       (439,636)
                                                   ------------    ------------    ------------    ------------
Loss before income tax benefit .................     (8,915,465)     (2,451,590)    (22,474,672)    (11,930,707)
Income tax benefit .............................              -               -         (57,708)              -
                                                   ------------    ------------    ------------    ------------
Net Loss .......................................     (8,915,465)     (2,451,590)    (22,416,964)    (11,930,707)

Conversion discount on preferred stock .........       (487,861)              -      (1,447,559)              -
                                                   ------------    ------------    ------------    ------------
Loss attributable to common shareholders .......   $ (9,403,326)   $ (2,451,590)   $(23,864,523)   $(11,930,707)
                                                   ============    ============    ============    ============
Loss per common share
Basic and diluted: .............................          (0.34)          (0.09)          (0.86)          (0.44)
                                                   ============    ============    ============    ============
Weighted average number of shares outstanding
Basic and diluted: .............................     27,842,000      27,842,000      27,842,000      27,116,000
                                                   ============    ============    ============    ============


</TABLE>

   See accompanying notes to the condensed consolidated financial statements.




                                  Page 4 of 38
<PAGE>

<TABLE>
<CAPTION>

                                    LASERSIGHT INCORPORATED AND SUBSIDIARIES
                                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                                   (Unaudited)
<S>                                                                    <C>             <C>
                                                                           2003              2002
                                                                      -------------      -------------
Cash flows from operating activities
Net loss ...........................................................   $(22,416,964)   $(11,930,707)
 Adjustments to reconcile net loss to net cash used in
 operating activities:
Depreciation and amortization ......................................        571,011       1,281,147
Common stock issued for services ...................................              -          42,500
Provision for uncollectable accounts, net ..........................      3,028,604       1,263,947
Write off of Inventory .............................................      3,588,040               -
Impairment on patents...............................................      4,098,607               -
Stock options issued for services ..................................          4,251          12,377
Changes in assets and liabilities:
   Accounts and notes receivable ...................................      3,336,607       3,429,492
   Inventories .....................................................      1,272,653       2,197,423
   Accounts payable ................................................        329,358        (284,767)
   Accrued expenses ................................................      6,390,970        (214,652)
   Deferred revenue ................................................     (1,322,542)      1,730,348
   Other ...........................................................        500,396         639,599
                                                                       ------------    ------------

Net cash used in operating activities ..............................       (619,009)     (1,833,293)

Cash flows from investing activities
Purchases of property and equipment, net ...........................        (13,897)         (4,437)
                                                                       ------------    ------------

Net cash used in investing activities ..............................        (13,897)         (4,437)

Cash flows from financing activities
Payments on debt financing .........................................       (240,577)       (620,000)
 Proceeds from ESPP ................................................              -           1,140
Proceeds from stock subscription receivable ........................         32,336          98,402
                                                                       ------------    ------------

Net cash used in financing activities ..............................       (208,241)       (520,458)
                                                                       ------------    ------------

Decrease in cash and cash equivalents ..............................       (841,147)     (2,358,188)

Cash and cash equivalents, beginning of period .....................      1,065,778       2,762,062
                                                                       ------------    ------------

Cash and cash equivalents, end of period ...........................   $    224,631    $    403,874
                                                                       ============    ============

</TABLE>

   See accompanying notes to the condensed consolidated financial statements.



                                  Page 5 of 38
<PAGE>



                    LASERSIGHT INCORPORATED AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
         Three and Nine Months Periods Ended September 30, 2003 and 2002


NOTE 1   BASIS OF PRESENTATION

         The accompanying unaudited, condensed consolidated financial statements
         of LaserSight Incorporated and subsidiaries ("LaserSight", or the
         "Company") as of September 30, 2003, and for the three and nine month
         periods ended September 30, 2003 and 2002 have been prepared in
         accordance with accounting principles generally accepted in the United
         States of America on a going concern basis, which contemplates the
         realization of assets and the discharge of liabilities in the normal
         course of business for the foreseeable future. The Company has suffered
         recurring losses from operations and has a significant accumulated
         deficit that had raised substantial doubt about its ability to continue
         as a going concern. The Company had an accumulated deficit of $122
         million at September 30, 2003.

         On September 5, 2003 the Company and two of its subsidiaries ("the
         Debtors") filed a voluntary petition for relief in the United States
         Bankruptcy Court, Middle District of Florida, Orlando Division,("the
         Bankruptcy Court") under Chapter 11 of Title 11 of the U.S. Bankruptcy
         Code ("the Bankruptcy Code or Chapter 11"). The Debtors continued to
         operate their businesses as debtors-in-possession ("DIP") through the
         close of business June 9, 2004. The Company filed a plan of
         reorganization (the Plan) with the Bankruptcy Court on April 28, 2004,
         the Bankruptcy Court confirmed the Plan. On June 19 2004, under Chapter
         11, certain claims against the Company in existence prior to the filing
         of the petitions for relief under the federal bankruptcy laws were
         stayed while the Company continued business operations as
         Debtor-in-possession. Claims secured against the Company's assets
         "secured claims" also are stayed, although the holders of such claims
         have the right to move the court for relief from the stay. The majority
         of secured claims are held by Heller Healthcare Finance, Inc ("Heller")
         and GE Healthcare Financial Services, Inc., as successor-in-interest to
         Heller (collectively "GE"). $10,000 of professional fees for bankruptcy
         related legal services were paid in the three months ended September
         30, 2003.

         Outlined below are some of the additional factors that led up to the
         Chapter 11 filing:

         As previously announced, in August 2002, the Company and New Industries
         Investment Consultants (HK),LTD. ("NIIC") and New Industries Investment
         Group ("NII") (collectively the "China Group") had entered into a
         strategic relationship, including the purchase of at least $10 million
         worth of products during a twelve-month period ending in August of
         2003, distribution of the Company's products in mainland China, Hong
         Kong, Macao and Taiwan, and a $2.0 million equity investment in the
         Company by the China Group. The investment in the Company was in the
         form of the purchase of Convertible Preferred Stock, the Series H Stock
         that, subject to certain restrictions, was convertible into
         approximately 40% of the Company's Common Stock.

                                  Page 6 of 38
<PAGE>
         At the beginning of 2003, the Company did not have cash available to
         construct machines under the strategic relationship and requested a
         modification of the arrangement that would include prepayment by the
         China Group. The China Group purchased through prepayment some
         additional product, but resisted further purchases by prepayment
         without certain cost reductions and changes in operations. Prior to the
         execution of the agreement, the China Group had purchased approximately
         $4.5 million worth of the Company's products. Thereafter the China
         Group prepaid for $2.2 million worth of product, for a total of $6.7
         million of the original $10 million envisioned in the strategic
         relationship.

         As previously announced, the Company had been in continuous
         negotiations with New Industries Investment Consultants (HK), Ltd.
         ("NIMD" also a member of the "China Group") to secure immediate cash
         payments for purchase of Company products, to further define the terms
         of a long-term strategy for the Company in China, and to outline a
         framework for additional product purchases. The Company reached an
         agreement with the China Group on June 20, 2003. That agreement called
         for the China Group to proceed with further purchases in order to meet
         the $10,000,000 purchase requirement from the August 2002 agreement and
         purchase additional product above and beyond the original purchase
         requirement if the Company was making substantial progress with regard
         to its restructured business plan. While the Company sold products to
         the China Group during the second and third quarter of 2003, and they
         made advance payments on those purchases, sales levels were well below
         those contemplated in the original agreements.

         On June 20, 2003 the Company announced that it had been advised by GE
         that its loans were in default due to an adverse material change in the
         financial condition and business operations. The Company was
         negotiating with GE for a modification and restructuring of its
         defaulted loans, and these negotiations had progressed to the "term
         sheet" stage by early August of 2003.

         The Company also announced that Francis E. O'Donnell, Jr., M.D. and
         David Peroni had resigned from their positions as members of the Board
         of Directors and that Dr. O'Donnell had resigned as Chairman of the
         Board of Directors. Xianding Weng was elected Chairman of the Board.
         Mr. Weng had been a director of the Company since October 2002 and
         founded the China Group in Shenzhen, China in 1993, serving as its
         President and Chief Executive Officer.

         On August 22, 2003 the Company announced that Mr. Michael R. Farris
         would no longer serve as Chief Executive Officer and President nor as a
         Director. Danghui ("David") Liu, Ph. D., Vice President of Product
         Development and Technical Marketing, was named Interim CEO.

         In September 2003, the Company announced that it had failed to timely
         file its second quarter SEC Form 10-Q due on August 14, 2003. The
         Company did file a Form 12b-25 on August 14, 2003 advising that the
         Company was still working to put together the necessary data to file
         the quarterly report.

         As a late filer, the Company had a fifth character "E" added to its
         security trading symbol to denote securities delinquent in their
         required filings. Securities so denoted are removed from the OTCBB
         after the applicable 30-day grace period expires. After the Company was
         removed from OTCBB, it has been traded in the over-the-counter (OTC)
         market via the "Pink Sheets".

         The Company had entered into new discussions related to the payment
         terms of its License and Royalty Agreement covering its keratome
         products. The licensors issued a third notice of default to the Company
         on May 6, 2003 and served legal action against the Company on August
         12, 2003 invoking an acceleration clause for the entire balance of
         approximately $3.3 million under the License Agreement. The Company
         continued its discussions, but the lack of resolution of these issues
         made things difficult for the Company to continue to operate without
         the protection a bankruptcy petition would provide.

         The Company had significant liquidity and capital resource issues
         relative to the timing of our accounts receivable collection and the
         successful completion of new sales compared to our ongoing payment
         obligations. As a result of the aforementioned, on September 5, 2004
         the Company filed a voluntary petition for relief in the United States
         Bankruptcy Court, Middle District of Florida - Orlando Division under
         Chapter 11 of the U.S. Bankruptcy Code.

         Even with the Chapter 11 protection, the Company's ability to continue
         as a going concern is uncertain and dependent upon continuing to
         achieve improved operating results and cash flows or obtaining
         additional equity capital and/or debt financing. These condensed
         consolidated financial statements include substantial re-structuring
         charges recorded during the second quarter of 2003 necessary to reflect
         the diminution of asset carrying values due to Chapter 11 related
         re-structuring charges and the Company's re-focus of its products to
         core product lines.
                                  Page 7 of 38
<PAGE>

         The condensed consolidated financial statements have been prepared in
         accordance with the requirements for interim financial information and
         with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
         Accordingly, they do not include all of the information and note
         disclosures required by accounting principles generally accepted in the
         United States of America for complete financial statements. These
         condensed consolidated financial statements should be read in
         conjunction with the consolidated financial statements and notes
         thereto included in LaserSight's annual report on Form 10-K for the
         year ended December 31, 2002. In the opinion of management, the
         condensed consolidated financial statements include all adjustments
         necessary for a fair presentation of consolidated financial position
         and the results of operations and cash flows for the periods presented.
         There are no other components of comprehensive loss other than the
         Company's consolidated net loss for the three and nine month periods
         ended September 30, 2003 and 2002. The results of operations for the
         three and nine month periods ended September 30, 2003 are not
         necessarily indicative of the operating results for the full year.

         RECLASSIFICATIONS

         Certain prior years' amounts have been reclassified to conform with the
         current year presentation.


NOTE 2   CRITICAL ACCOUNTING POLICIES

         The Company's condensed consolidated financial statements have been
         prepared in accordance with accounting principles generally accepted in
         the United States of America. Preparation of these statements requires
         management to make judgments and estimates. Some accounting policies
         have a significant impact on amounts reported in these financial
         statements. A summary of significant accounting policies and a
         description of accounting policies that are considered critical may be
         found in our 2002 Annual Report on Form 10-K, filed on March 28, 2003,
         in the Critical Accounting Policies and Estimates section of "Item 7. -
         Management's Discussion and Analysis of Financial Condition and Results
         of Operations."

NOTE 3   PER SHARE INFORMATION

         Basic loss per common share is computed using the weighted average
         number of common shares and contingently issuable shares (to the extent
         that all necessary contingencies have been satisfied). Diluted loss per
         common share is computed using the weighted average number of common
         shares, contingently issuable shares, and common share equivalents
         outstanding during each period. Common share equivalents include
         options, warrants to purchase Common Stock, and convertible Preferred
         Stock and are included in the computation using the treasury stock
         method if they would have a dilutive effect. As a result of the
         September 5, 2003 Chapter 11 filing, all common and preferred shares
         outstanding at and prior to June 30, 2004, including options and
         warrants, were canceled as required by the approved bankruptcy plan,
         effective June 30, 2004, the Company issued 9,997,195 new common shares
         (see Note 1). The following table presents earnings per share figures
         as if the reorganization of the capital structure had taken place as
         of the beginning of the first period presented.

                                      Three Months Ended     Nine Months Ended
                                         September 30,         September 30,
                                    --------------------- ---------------------
                                       2003        2002       2003       2002
                                       ----        ----       ----       ----
Net income (loss) per common
share basic and diluted  .........     ($0.94)    ($0.25)    ($2.39)    ($1.19)

Weighted average number of
common shares outstanding - basic
and diluted .....................   9,997,195  9,997,195  9,997,195  9,997,195



NOTE 4   INVENTORIES

         Inventories, which consist primarily of excimer and erbium laser
         systems and related parts and components, are stated at the lower of
         cost or market. Cost is determined using the standard cost method,
         which approximates cost determined on the first-in first-out basis. As
         a result of the company's business financial difficulties, the company
         increased its inventory reserves at June 30, 2003. The additional
         reserves which are classified as cost of revenues, approximated $3.6
         million during the second quarter, which brought the total reserve to
         $7.1 million at September 30, 2003. The components of inventories, net


                                  Page 8 of 38
<PAGE>

         of reserves, at September 30, 2003 and December 31, 2002 are summarized
         as follows:



                                            September 30,   December 31, 2002
                                            -------------   -----------------
                                                2003
                                                ----

         Raw materials                      $ 3,469,706             5,994,564
         Work-in-process                        597,700               245,195
         Finished goods                             -0-             2,057,672
         Test equipment - clinical trials           -0-               630,668
                                            -----------             ---------
                                              4,067,406             8,928,099
                                            ===========             =========

NOTE 5   SEGMENT INFORMATION

         The Company's operations principally include refractive products.
         Refractive product operations primarily involve the development,
         manufacture and sale of ophthalmic lasers and related devices for use
         in vision correction procedures. Patent services involve the revenues
         and expenses generated from the ownership of certain refractive laser
         patents.

         Operating profit is total revenue less operating expenses. In
         determining operating profit for operating segments, the following
         items have not been considered: general corporate expenses,
         non-operating income and expense and income tax expense. Identifiable
         assets by operating segment are those that are used by or applicable to
         each operating segment. General corporate assets consist primarily of
         cash and income tax accounts.

         The table below summarizes information about reported segments as of
         and for the three months ended September 30:


<TABLE>
<CAPTION>

<S>                                  <C>                <C>               <C>                <C>               <C>
                                                                                        Depreciation
                                       Operating        Operating                           and            Capital
                                        Revenues      Profit (Loss)        Assets       Amortization    Expenditures
                                        --------      -------------        ------       ------------    ------------
     2003
     ----
     Operating  segments:
          Refractive products        $ 1,615,725        (8,325,360)       5,622,761          223,896               --
          Patent services                234,810           234,810               --               --               --
          General corporate                   --          (776,429)         245,086              141               --
                                     -----------        ----------       ----------          -------           ------
     Consolidated total              $ 1,850,335        (8,866,979)       5,867,847          224,037               --
                                     ===========        ==========       ==========          =======           ======

     2002
     ----
     Operating  segments:
          Refractive products        $ 2,526,171        (2,077,003)      24,374,832          321,577               --
          Patent services                224,096           224,096               --              --                --
          General corporate                               (386,107)         815,689              436               --
                                     -----------        ----------       ----------          -------           ------
     Consolidated total              $ 2,750,267        (2,239,014)      25,190,521          322,013               --
                                     ===========        ==========       ==========          =======           ======
</TABLE>

                                  Page 9 of 38
<PAGE>

     Amortization of deferred financing costs and discount on note payable
     of zero and $63,612 for the three months ended September 30, 2003 and
     2002, respectively, is included as interest expense.


         The table below summarizes information about reported segments as of
         and for the nine months ended September 30:

<TABLE>
<CAPTION>

<S>                                  <C>                <C>               <C>                <C>               <C>
                                                                                        Depreciation
                                       Operating        Operating                           and            Capital
                                        Revenues      Profit (Loss)        Assets       Amortization    Expenditures
                                        --------      -------------        ------       ------------    ------------
     2003
     ----
     Operating  segments:
          Refractive products        $ 5,297,522       (21,442,871)       5,622,761          570,588           13,897
          Patent services                704,430           704,430               --               --               --
          General corporate                   --        (1,570,089)         245,086              423               --
                                     -----------        ----------       ----------        ---------           ------
     Consolidated total              $ 6,001,952       (22,308,530)       5,867,847          571,011           13,897
                                     ===========        ==========       ==========        =========           ======

     2002
     ----
     Operating  segments:
          Refractive products        $ 5,752,087       (11,163,814)      24,374,832        1,087,646            4,437
          Patent services                867,009           867,009               --               --               --
          General corporate                   --        (1,269,284)         815,689            2,665               --
                                     -----------        ----------       ----------        ---------           ------
     Consolidated total              $ 6,619,096       (11,566,089)      25,190,521        1,090,311            4,437
                                     ===========        ==========       ==========        =========           ======
</TABLE>

     Amortization of deferred financing costs and discount on note payable of
     $12,246 and $190,836 for the nine months ended September 30, 2003 and 2002,
     respectively, is included as interest expense.

NOTE 6   AMENDED LOAN AGREEMENT

         On March 12, 2003, our loan agreement with GE was extended 30 days from
         March 12, 2003 to April 11, 2003. On March 31, 2003, our loan agreement
         with GE was amended again. In addition to the amendment, GE waived our
         failure to comply with the net revenue covenant for the fourth quarter
         of 2002. In exchange for the amendment and waiver, we paid
         approximately $9,250 in fees to GE and agreed to increase our monthly
         principal payments to $45,000 beginning in April 2003. Revised
         covenants became effective on March 31, 2003 that decreased the minimum
         level of net worth to $1.0 million, minimum tangible net worth to
         negative $4.0 million and minimum quarterly net revenue during 2003 to
         $2.0 million. We had agreed to work in good faith with GE to adjust
         these covenants by May 31, 2003 based on our first quarter 2003
         financial results and our ongoing efforts to obtain additional cash
         infusion. As discussed above, on June 20, 2003 the Company announced
         that it had been advised by GE, that its loans were in default due to
         an adverse material change in the financial condition and business
         operations. The Company continued to negotiate with GE during the June
         and July 2003 period until a new agreement was executed on August 28,
         2003 providing for an extension of its loans through January 2005.
         Since the September 5, 2003 bankruptcy filing, the Company had been in
         active discussions with GE for further modifications of the debt.

         On August 30, 2004, the Company signed an amended agreement with GE.
         The new note was effective June 30, 2004 and matures June 30, 2007. The
         note bears 9% interest per year. The loan covenants were modified to:

                                 Page 10 of 38
<PAGE>

         net worth $750,000, tangible net worth $1,000,000 and minimum quarterly
         revenue of $1,000,000. The note also requires all SEC filings to be up
         to date by November 30, 2004. GE was issued a warrant to purchase
         100,000 shares of common stock at $0.25 per share, or $0.40 per share
         if the China Group converts their DIP loan to equity. The warrant
         expires June 30, 2008. After adding legal fees, commitment fees and
         termination fees, the new principal balance was $2,149,249 as of June
         30, 2004.

NOTE 7   CHINA BACKGROUND

         As indicated in Note 1, we had been in continuous negotiations with the
         China Group to secure immediate cash payments for the purchase of
         Company products, further define the terms of the a long term strategy
         for the Company in China, and to outline a framework for additional
         product purchases. Further background on the China Group:

         Shenzhen New Industries Medical Development Co., Ltd. ("NIMD") was
         founded and incorporated by the Medical Investment Department of the
         People's Republic of China in 1995 by its parent company, New
         Industries Investment Group ("NII"). It specializes in marketing and
         distribution of LASIK surgery devices and equipment, as well as in
         investment

         NIMD became the exclusive distributor in China for LaserSight in
         September 2002. NIMD purchased more than $7.5 million value of
         LaserSight's products and services after it was engaged in the
         exclusive distributorship with LaserSight and before LaserSight went
         into Chapter 11.

         New Industries Investment Consultants (H.K.) Ltd ("NIIC") specializes
         in hi-tech business investment and consulting services. It is
         registered in Hong Kong. It was incorporated in 1994 by its principal
         investor Mr. Xianding Weng (a major shareholder of NII, and NII's CEO).
         NIIC with NIMD, pioneers in the laser refractive surgery industry in
         China, introduced Schwind's excimer lasers into Mainland China in early
         1990's.

         The China Group provided $2.0 million of debtor-in-possession financing
         from December 2003 through June 2004. On June 30, 2004, $1.0 million of
         the DIP financing was converted into 6,850,000 shares of common stock
         which resulted in the China Group owning 72% of the Company. Revenues
         from the China Group were $0.8 million and $3.6 million for the three
         and nine months ended September 30, 2003, respectively. The loss of the
         China Group as a customer would have a significant adverse affect on
         The Company.


NOTE 8   STOCK BASED COMPENSATION

         The Company accounts for stock-based employee compensation plans using
         the intrinsic value method under Accounting Principles Board Opinion
         No. 25 and related interpretations. Accordingly, stock-based employee
         compensation cost is not reflected in net earnings, as all stock
         options granted under the plans had an exercise price equal to the
         market value of the underlying common stock on the date of grant. Had
         compensation cost for the Company's stock-based compensation plans been
         determined based on the fair value at the grant dates for awards under
         those plans consistent with the method of Statement No. 123,
         "Accounting for Stock-Based Compensation," the Company's net earnings
         and earnings per share would have been reduced to the pro forma amounts
         indicated below:


                                 Page 11 of 38
<PAGE>

<TABLE>
<CAPTION>

                                                                         Three Months Ended
                                                                         ------------------
                                                                  Sept. 30, 2003    Sept. 30, 2002
                                                                  --------------    --------------
<S>                                                              <C>                <C>
         Net loss, as reported                                    $  (8,915,465)       (2,451,590)
         Deduct: Total stock-based employee
             compensation expense determined under
             fair value based method for all awards,
             net of related tax effects                                 190,527           209,307
                                                                  -------------       -----------
         Pro forma net loss                                          (9,105,992)       (2,660,897)

         Conversion discount on preferred stock                        (487,861)               --
                                                                  -------------       -----------
         Pro forma loss attributable to common shareholders          (9,593,853)       (2,660,897)
                                                                  =============        ==========
         Basic and diluted loss per share:
             As reported                                               $ (0.34)            (0.09)
             Pro forma                                                   (0.34)            (0.10)



                                                                         Nine Months Ended
                                                                         -----------------
                                                                  Sept. 30, 2003    Sept. 30, 2002
                                                                  --------------    --------------


         Net loss, as reported                                    $ (22,416,964)      (11,930,707)
         Deduct: Total stock-based employee
             compensation expense determined under
             fair value based method for all awards,
             net of related tax effects                                 571,581           627,195
                                                                  -------------       -----------
         Pro forma net loss                                         (22,988,545)      (12,557,902)

         Conversion discount on preferred stock                      (1,447,559)               --
                                                                  -------------       -----------
         Pro forma loss attributable to common shareholders         (24,436,104)      (12,557,902)
                                                                  =============        ==========
         Basic and diluted loss per share:
             As reported                                               $ (0.86)            (0.44)
             Pro forma                                                   (0.88)            (0.46)
</TABLE>


         As previously announced, as a result of the Chapter 11 filing the
         Company cancelled all of the common and preferred shares, options and
         warrant, outstanding at June 30, 2004 and issued 9,997,195 new shares
         on June 30, 2004. Included in the 9,997,195 new shares are 1,134,000
         shares to be issued to the creditors of the Company after the
         resolution of a creditor's objection.


NOTE  9   LITIGATION

          Distributors. In October 2001, three entities that previously served
          as distributors for LaserSight's excimer laser system in the United
          States, Balance, Inc. d/b/a Bal-Tech Medical, Sun Medical, Inc. and
          Surgical Lasers, Inc., filed a lawsuit in the Circuit Court of the
          Ninth Judicial Circuit, Orange County, Florida. The lawsuit named
          LaserSight Technologies, Mr. Michael Farris, former Chief Executive
          Officer, and James Spivey, LaserSight Technologies' former Vice

                                 Page 12 of 38
<PAGE>

          President of Sales, as defendants. The lawsuit alleged various claims
          related to LaserSight Technologies termination of the distribution
          arrangements with the plaintiffs including breach of contract, breach
          of the covenant of good faith and fair dealing, tortuous interference
          with business relationships, fraudulent misrepresentation, conversion
          and unjust enrichment. Plaintiffs requested actual damages in excess
          of $5.0 million, punitive damages, prejudgment interest, attorneys'
          fees and costs and other equitable relief. We filed a motion to
          dismiss that was denied. We then filed an answer and counterclaim. The
          plaintiffs had answered the counterclaim and had moved to strike some
          of our affirmative defenses, and we had moved to strike portions of
          the plaintiff's answer. To date, limited discovery had occurred. In
          March 2003, one of the three entities agreed to dismiss their claims
          with prejudice. Management believed that LaserSight Technologies had
          satisfied its obligations under the distribution agreements, and that
          the allegations against LaserSight Technologies, Mr. Farris and Mr.
          Spivey were without merit. As a result of the September 2003 Chapter
          11 petition, and subsequent re-structuring, claims such as these have
          been resolved with the issuance of a portion of the 9,997,195 new
          common shares.

          Italian Distributor. In February 2003, an Italian court issued an
          order restraining LaserSight Technologies from marketing our AstraPro
          software at a trade show in Italy. This restraining order was issued
          in favor of LIGI Tecnologie Medicali S.p.a. (LIGI), a distributor of
          our products, and alleged that our AstraPro software product infringes
          certain European patents owned by LIGI. We had retained Italian legal
          counsel to defend us in this litigation, and we were informed that the
          Italian court had revoked the restraining order and ruled that LIGI
          must pay our attorney's fees in connection with our defense of the
          restraining order. In addition, our Italian legal counsel informed us
          that LIGI had filed a motion for a permanent injunction. We believe
          that our AstraPro software does not infringe the European patents
          owned by LIGI, but due to limited cash flow the Company has not
          defended its position. Management believes that the outcome of this
          litigation will not have a material adverse impact on LaserSight's
          business, financial condition or results from operations. Since the
          Chapter 11 petition does not apply to foreign courts, this action is
          still pending.

          Former Shareholder of MRF (d/b/a TFG). On May 14, 2001, a motion for
          summary judgment was granted in favor of Michael R. Farris, former
          Chief Executive Officer, in connection with a lawsuit that was filed
          on November 12, 1999 in the U.S. District Court for the Eastern
          District of Missouri on behalf of a former shareholder of TFG, a
          wholly owned subsidiary of LaserSight. The lawsuit named Mr. Farris,
          LaserSight's former chief executive officer, as the sole defendant and
          alleged fraud and breach of fiduciary duty by Mr. Farris in connection
          with the redemption by TFG of the former shareholder's capital stock
          in TFG. At the time of the redemption, which redemption occurred prior
          to LaserSight's acquisition of TFG, Mr. Farris was the president and
          chief executive officer of TFG. LaserSight's Board of Directors
          authorized LaserSight to retain and, to the fullest extent permitted
          by the Delaware General Corporation Law, pay the fees of counsel to
          defend Mr. Farris, TFG and LaserSight in the litigation so long as a
          court had not determined that Mr. Farris failed to act in good faith
          and in a manner Mr. Farris reasonably believed to be in the best
          interest of TFG at the time of the redemption. The plaintiff appealed
          the U.S. District Court's order granting summary judgment in favor of
          Mr. Farris to the United States Court of Appeals for the 8th Circuit.
          The appeal was heard in January 2002; on March 13, 2002 the 8th
          Circuit reversed the District Court with respect to the starting date
          of the statute of limitations related to an allegation of fraud
          committed by a fiduciary. We had agreed to the terms of a settlement
          with the plaintiff. The terms of the settlement require three payments
          totaling $140,000. The first payment of $50,000 was paid in October
          2002, the second payment of $45,000 was due in September 2003, and the
          third payment of $45,000 was due in March 2004. All of the payments
          are to be made without interest unless there were to be a default in
          payment in which event interest would accrue at 9%. During 2002, we
          recorded settlement expense of $140,000 related to this settlement.

                                 Page 13 of 38
<PAGE>

          This creditor did not file a proof of claim in the  bankruptcy  case
          and  accordingly  the claim was discharged in bankruptcy.

          Lambda Physik. In January 2000, a lawsuit was filed on behalf of
          Lambda Physik, Inc. (Lambda) alleging that the Company is in breach of
          an agreement it entered into with Lambda for the purchase of lasers
          from Lambda. Lambda has requested approximately $1.9 million in
          damages, plus interest, costs and attorney's fees. The Company had
          since successfully argued for a change in venue to Orange County,
          Florida. After no activity for over a year, the plaintiff filed a
          motion in July 2002 to have the court set a trial date, which they set
          for December 2002. Subsequently, the plaintiff filed a motion for
          continuance of the trial to allow the parties an opportunity to settle
          the dispute. In October 2002, the court entered an order continuing
          the trial and will reschedule only upon the filing of a new notice for
          trial by either party. The Company believes that the allegations made
          by the plaintiff are without merit. Management believed that the
          Company has satisfied its obligations under the agreement and that
          this action would not have a material adverse effect on the Company's
          financial condition or results of operations. This action was
          settled in bankruptcy.

          Kremer. In November 2000, a lawsuit was filed in the United States
          District Court for the Eastern District of Pennsylvania on behalf of
          Frederic B. Kremer, M.D. and Eyes of the Future, P.C. alleging that
          the Company is in breach of certain terms and conditions of an
          agreement it entered into with Dr. Kremer relating to the Company's
          purchase of a patent from Dr. Kremer. Dr. Kremer has requested
          equitable relief in the form of a declaratory judgment as well as
          damages in excess of $1.6 million, plus interest, costs and attorney's
          fees. The parties had agreed to postpone discovery and attempt to
          agree on the final form of a settlement with the plaintiffs. The terms
          of the settlement agreement, as currently contemplated, would not
          require the Company to make any cash payments. The Company believed
          that the allegations made by the plaintiff were without merit.
          Management believed that the Company had satisfied its obligations
          under the agreement and that this action would not have a material
          adverse effect on the Company's financial condition or results of
          operations. This action was settled in bankruptcy.

          Routine Matters. In addition, we are involved from time to time in
          routine litigation and other legal proceedings incidental to our
          business. Although no assurance can be given as to the outcome or
          expense associated with any of these proceedings, we believe that none
          of such proceedings, either individually or in the aggregate, will
          have a material adverse effect on the financial condition of
          LaserSight.

                                 Page 14 of 38
<PAGE>



ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

         LaserSight is principally engaged in the manufacture and supply of
narrow beam scanning excimer laser systems, topography-based diagnostic
workstations, and other related products used to perform procedures that correct
common refractive vision disorders such as nearsightedness, farsightedness and
astigmatism. Since 1994, the Company has marketed its laser systems commercially
in over 30 countries worldwide and currently has an installed base of
approximately 400 laser systems, including over 220 of our LaserScan LSX(TM)
laser systems. We are currently focused on selling in selected international
markets, primarily China.

         We have significant liquidity and capital resource issues relative to
the timing of our accounts receivable collection and the successful completion
of new sales compared to our ongoing payment obligations, and our recurring
losses from operations and net capital deficiency raise substantial doubt about
our ability to continue as a going concern. We have experienced significant
losses and operating cash flow deficits, and we expect that operating cash flow
deficits will continue without improvement in our operating results. In August
2002 and February 2004, we executed definitive agreements relating to our China
Transaction (see "China Transaction").

CHINA TRANSACTION

         In July 2002, we signed a non-binding letter of intent with a company
based in the People's Republic of China that specializes in advanced medical
treatment services, medical device distribution and medical project investment.
Definitive agreements relating to the China Group were executed on August 15,
2002, establishing a strategic relationship that included the commitment to
purchase at least $10.0 million worth of our products during the 12-month period
ending August 15, 2003, distribution of our products in mainland China, Hong
Kong, Macao and Taiwan, and a $2.0 million investment in LaserSight. The
investment was completed in October 2002 in the form of Series H convertible
preferred stock that, subject to certain restrictions, could have been converted
into shares of our common stock and result in the purchaser holding
approximately 40% of our common stock. The products purchased were paid by
irrevocable letters of credit, confirmed by a U.S. bank and payable upon
presentation of shipping documents. The Company started shipping products under
this agreement in August 2002. The Company reached an amended agreement with the
China Group on June 20, 2003. That agreement called for the China Group to
proceed with further purchases in order to meet the $10,000,000 purchase
requirement from the August 2002 agreement and purchase additional product above
and beyond the original purchase requirement if the Company was making
substantial progress with regard to its restructured business plan. The China
Group provided $2.0 million of debtor-in-possession financing. On June 30, 2004,
$1.0 million of the DIP financing was converted into 6,850,000 shares of common
stock and the China Group now owns 72% of the Company.



RESULTS OF OPERATIONS

         The following table sets forth for the periods indicated information
derived from our statements of operations for those periods expressed as a
percentage of net sales, and the percentage change in such items from the
comparable prior year period. Any trends illustrated in the following table are
not necessarily indicative of future results.


                                 Page 15 of 38
<PAGE>

<TABLE>
<CAPTION>

                                                                                                    Percent Increase (Decrease)
                                                     As a Percentage of Net Sales                        Over Prior Periods
                                                     ----------------------------                        ------------------

                                                Three Months              Nine Months         Three Months        Nine Months
                                                    Ended                   Ended                 Ended             Ended
                                                September 30,           September 30,         September 30,       September 30,
                                               2003       2002         2003      2002        2003 vs. 2002      2003 vs. 2002
                                               ----       ----         ----      ----        -------------      -------------
<S>                                            <C>        <C>          <C>       <C>         <C>      <C>       <C>      <C>
Statement of Operations Data:
Net Revenues:
   Refractive products                         87.3%      91.9%        88.3%     86.9%           -36.0%             -7.9%
   Patent services                             12.7%       8.1%        11.7%     13.1%             4.8%            -18.8%
                                              -----       ----        -----      ----            -----             -----
       Net Revenues                           100.0%     100.0%       100.0%    100.0%           -32.7%             -9.3%
Cost of Revenue                                27.6%      51.5%       106.6%     58.2%           -64.0%             66.0%
                                              -----       ----        -----      ----            -----             -----
Gross Profit (1)                               72.4%      48.5%        -6.6%     41.8%             0.5%           -114.2%
Research, development and
   regulatory expenses (2)                      3.3%       7.4%         5.9%     17.2%           -69.8%            -68.9%
Other general and administrative
   expenses                                   116.4%      90.5%       133.9%    160.5%           -13.4%            -24.3%
Selling-related expenses (3)                  180.6%      27.8%        75.8%     33.6%           337.1%            104.2%
Impairment charge                               0.0%       0.0%        68.3%      0.0%             0.0%             61.9%
Allowed warranty claims                       250.8%       0.0%        77.3%      0.0%             0.0%              0.0%
Amortization of intangibles                     0.4%       4.2%         4.0%      5.2%           -92.8%            -30.9%
                                              -----       ----        -----      ----            -----             -----
Loss from continuing operations.             -479.2%     -81.4%      -371.7%    -174.7%          296.0%             92.9%


</TABLE>



(1)      As a percentage of net revenues, the gross loss for refractive
         products only for the three months ended September 30, 2003 and 2002,
         and the nine months ended September 30, 2003 and 2002, were 68%, 44%,
         (21%) and 33%, respectively.

(2)      As a percentage of refractive product net sales, research, development
         and regulatory expenses for the three months ended September 30, 2003
         and 2002, and the nine months ended September 30, 2003 and 2002, were
         4%, 8%, 7% and 20%, respectively.

(3)      As a percentage of refractive product net sales, selling-related
         expenses for the three months ended September 30, 2003 and 2002, and
         the nine months ended September 30, 2003 and 2002, were 207%, 30%, 86%
         and 39%, respectively.



THREE MONTHS ENDED SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2002

         REVENUES. Net revenues for the three months ended September 30, 2003
decreased by $0.9 million, or 33%, to $1.9 million from $2.8 million for the
comparable period in 2002.

         During the three months ended September 30, 2003, refractive products
revenues decreased $0.9 million, or 36%, to $1.6 million from $2.5 million for
the comparable period in 2002. During the three months ended September 30, 2003,
there were no excimer laser system sales as compared to $1.8 million in revenues
over the same period in 2002. During the three months ended September 30, 2003,

                                 Page 16 of 38
<PAGE>

no laser systems were sold compared to eight laser systems for the comparable
period in 2002. During the three months ended September 30, 2003, parts revenues
accounted For approximately $1.4 million compared to $0.5 million for the
comparable period in 2002.


         Net revenues from patent services for the three months ended September
30, 2003 remained consistent at $0.2 million.

         Geographically, China has become our most significant market with $1.4
million in revenue during the three months ended September 30, 2003, most of
which resulted from the China Group.

          COST OF REVENUES; GROSS PROFIT. For the three months ended September
30, 2003 and 2002, gross profit margins were approximately 72% and 48%,
respectively. The gross margin increase during the three months ended September
30, 2003 was primarily attributable to increased parts sales at higher margins.

         RESEARCH, DEVELOPMENT AND REGULATORY EXPENSES. Research, development
and regulatory expenses for the three months ended September 30, 2003 decreased
approximately $142,000, or 70%, to $61,000 from $203,000 for the comparable
period in 2002. While decreasing our expenses including salaries, consulting
fees and materials, we still continued to develop our AstraMax diagnostic
workstation and excimer laser systems.

         OTHER GENERAL AND ADMINISTRATIVE EXPENSES. Other general and
administrative expenses for the three months ended September 30, 2003 decreased
$0.3 million, or 13%, to $2.2 million from $2.5 million for the comparable
period in 2002. This decrease was primarily due to a decrease in expenses
incurred at our refractive products subsidiary of approximately $0.1 million
related to cost reductions to the sales and marketing, customer support,
administration, a $0.1 million reduction in depreciation expense and a reduction
of $0.2 million in reduced bad debt expense.

         SELLING-RELATED EXPENSES AND ALLOWED WARRANTY CLAIMS. Selling-related
expenses consist of those items directly related to sales activities, including
commissions on sales, royalty or license fees, warranty expenses, and costs of
shipping and installation. Commissions and royalties, in particular, can vary
significantly from sale to sale or period to period depending on the location
and terms of each sale. Selling-related expenses for the three months ended
September 30, 2003 increased $2.6 million, or 337%, to a $3.3 million in 2003
from $0.8 million in 2002. This increase was primarily due to a $3.1 million
expense for future keratome license fees due immediately because of a default on
our agreement, offset by lower commissions and shipping expenses. A $4.6 million
expense for warranty claims allowed in bankruptcy was taken in the three months
ended September 30,2003.


         AMORTIZATION OF INTANGIBLES. During the three months ended September
30, 2003, costs relating to the amortization of intangible assets decreased
$107,000, or 93% to $8,000 in 2003 from $115,000 for the comparable period in
2002. The reduction in amortization expense is attributable to the impairment
charge recorded by the Company of approximately $4.1 million related to
Keratome, acquired technology and diagnostic patents during the second quarter
of 2003. Management decided to write-off the assets due to a lack of a potential
market for its acquired technology.

         LOSS FROM OPERATIONS. The operating loss for the three months ended
September 30, 2003 was $8.9 million compared to the operating loss of $2.2
million for the same period in 2002. This increase in the loss from operations
was primarily due to the recording of allowing warranty claims in bankruptcy and
reduced sales of laser systems offset by overhead cost reductions.

..
         OTHER INCOME AND EXPENSES. Interest and other income for the three
months ended September 30, 2003 was $10,000, a decrease of $59,000 over the
comparable period in 2002. Interest and other income was earned from the
investment of cash and cash equivalents and the collection of long-term

                                 Page 17 of 38
<PAGE>

receivables related to laser system sales. During the three months ended
September 30, 2003, interest expense decreased by $0.1 million , or 58%, from
$142,000 (included litigation settlement) to $59,000 as a result of loan
discounts and fees being fully amortized. Other expenses for the three months
ended September 30, 2002 include $140,000 related to the settlement of
litigation with a former shareholder of The Farris Group (TFG).

         INCOME TAXES. During the three months ended September 30, 2003 and
2002, the Company had no income tax expense.

         NET LOSS. Net loss for the three months ended September 30, 2003, was
$8.9 million compared to a net loss of $2.5 million for the comparable period
in 2002. The increase in net loss for the three months ended September 30, 2003
can be attributed to a $3.4 million expense for future karatome license fees due
immediately because of a default on our license agreement and a $4.6 million
expense for warranty claims allowed in bankruptcy

         LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS. For the three months ended
September 30, 2003, the Company's loss attributable to common shareholders was
impacted by the accretion of the value of the conversion discount on the Series
H Preferred Stock.

         LOSS PER SHARE. The loss per basic and diluted share was $0.34 for the
three months ended September 30, 2003 and $0.09 for the comparable period in
2002. Since September 30, 2002, the weighted average shares of common stock
outstanding increased primarily due to the conversion of preferred stock during
May 2002. However, as previously announced the Company canceled all of the
common and preferred stock outstanding, including options and warrants, at June
30, 2004. On June 30, 2004 the Company issued 9,997,195 new common shares.

NINE MONTHS ENDED SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2002

         REVENUES. Net revenues for the nine months ended September 30, 2003
decreased by $0.6 million, or 9%, to $6.0 million from $6.6 million for the
comparable period in 2002.

         During the nine months ended September 30, 2003, refractive products
revenues decreased $.5 million, or 8%, to $5.3 million from $5.8 million for
the comparable period in 2002. This revenue decrease was primarily the result of
lower excimer laser unit sales. During the nine months ended September 30, 2003,
excimer laser system sales accounted for approximately $2.3 million in revenues
compared to $3.7 million in revenues over the same period in 2002. During the
nine months ended September 30, 2003, 11 laser systems were sold compared to 18
laser systems sold during the comparable period in 2002. During the nine months
ended September 30 2003, parts revenue accounted for approximately $2.4 million
compared to $1.5 million over the same period in 2002.


         Net revenues from patent services for the nine months ended September
30, 2003 decreased approximately $0.2 million, or 19%, to $0.7 million from $0.9
million for the comparable period in 2002, due to the inclusion of a one-time
payment in royalty revenue during June 2002.

         Geographically, China has become our most significant market with $3.9
million in revenue during the nine months ended September 30, 2003, all of which
resulted from the China Transaction. We expect China to continue as our most
significant market.

         COST OF REVENUES; GROSS PROFIT. For the nine months ended September 30,
2003 and 2002, gross profit margins were (7)% and 42%, respectively. The gross
margin decrease during the nine months ended September 30, 2003 was primarily
attributable to a $3.6 million inventory obsolescence reserve and lower sales of
lasers and the return of a laser previously sold. The Company's reorganization
plan, as confirmed by the bankruptcy court, called for a refocus of the
Company's products lines and the reduction of keratome and other obsolete
inventory.

                                 Page 18 of 38
<PAGE>

         RESEARCH, DEVELOPMENT AND REGULATORY EXPENSES. Research, development
and regulatory expenses for the nine months ended September 30, 2003 decreased
approximately $0.8 million, or 69%, to $0.4 million from $1.1 million for the
comparable period in 2002. While decreasing our expenses, we continued to
develop our AstraMax diagnostic workstation and excimer laser systems.

         OTHER GENERAL AND ADMINISTRATIVE EXPENSES. Other general and
administrative expenses for the nine months ended September 30, 2003 decreased
$2.6 million, or 24%, to $8.0 million from $10.6 million for the comparable
period in 2002. This decrease was primarily due to a decrease in expenses
incurred at our refractive products subsidiary of approximately $1.6 million
related to cost reductions to the sales and marketing, customer support,
administration, a $0.4 million reduction in depreciation expense and a reduction
of $0.9 million in bad debt expense.

         SELLING-RELATED EXPENSES AND ALLOWED WARRANTY CLAIMS. Selling-related
expenses consist of those items directly related to sales activities, including
commissions on sales, royalty or license fees, warranty expenses, and costs of
shipping and installation. Commissions and royalties, in particular, can vary
significantly from sale to sale or period to period depending on the location
and terms of each sale. Selling-related expenses for the nine months ended
September 30, 2003 increased $2.3 million, or 104%, to $4.5 million from $2.2
million during the comparable period in 2002. This increase was primarily due to
a $3.3 million expense for future keratome license fees due immediately because
of a default on our agreement. This increase was offset by $0.4 million decrease
in costs of sales commissions, warranty reserves and expenses related to
shipping our finished products. A $4.6 million expense for warranty claims
allowed in bankruptcy was recorded in the nine months ended September 30, 2003.

         AMORTIZATION OF INTANGIBLES. During the nine months ended September 30,
2003, costs relating to the amortization of intangible assets decreased $0.1
million, or 31% to $0.2 million in 2003 from $0.3 million for the comparable
period in 2002. The reduction in amortization expense is attributable to the
impairment charge recorded by the Company of approximately $4.1 million related
to Keratome, acquired technology and diagnostic patents during the second
quarter of 2003. Management decided to write-off the assets due to a lack of a
potential market for its acquired technology.

         IMPAITMENT OF PATENTS. Impairment of patents for the nine months ended
September 30, 2003 were $4.1 million. The Company recorded an impairment loss of
approximately $4.1 million related to Keratome, acquired technology and
diagnostic patents. Management decided to write-off the assets due to a lack of
a potential market for its acquired technology

         LOSS FROM OPERATIONS. The operating loss for the nine months ended
September 30, 2003 was $22.3 million compared to the operating loss of $11.6
million for the same period in 2002. This increase in the loss from operations
was primarily due to inventory write off and the impairment of patents offset by
reductions in operating expenses and lower related margins of our excimer laser
systems, AstraMax diagnostic workstations and AstraPro diagnostic software.

         OTHER INCOME AND EXPENSES. Interest and other income for the nine
months ended September 30, 2003 was $48,000, a decrease of $166,000 from the
comparable period in 2002. Interest and other income were earned from the
investment of cash and cash equivalents and the collection of long-term
receivables related to laser system sales. During the nine months ended
September 30, 2003, interest expense decreased by $0.2 million , or 51%, from
$0.4 million to $0.2 million as a result of fully amortized financing and fees
on our term loan. Other expenses for the nine months ended September 30, 2002
include $140,000 related to the settlement of litigation with a former
shareholder of TFG.

                                 Page 19 of 38
<PAGE>

         INCOME TAXES. For the nine months ended September 30, 2003, income tax
benefit amounted to approximately $58,000, which was related to a refund the
Company received from a settlement with the IRS on its 1995 return. During the
nine months ended September 30, 2002, we had no income tax expense.

        NET LOSS. Net loss for the nine months ended September 30, 2003, was
$22.4 million compared to a net loss of $11.9 million for the comparable period
in 2002. The increase in net loss for the nine months ended September 30, 2003
can be attributed to our Chapter 11 petition related re-structuring charges.

         LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS. For the nine months ended
September 30, 2003, the Company's loss attributable to common shareholders was
impacted by the accretion of the value of the conversion discount on the Series
H Preferred Stock.

         LOSS PER SHARE. The loss per basic and diluted share was $0.86 for the
nine months ended September 30, 2003 and $0.44 for the comparable period in
2002. As a result of the September 5, 2003 chapter 11 petition, the Company
cancelled all of its outstanding common and preferred shares, including options
and warrants. On June 30, 2004 the Company issued 9,997,195 new common shares.


LIQUIDITY AND CAPITAL RESOURCES

On September 5, 2003 the company filed for Chapter 11 bankruptcy protection and
reorganization. Under Chapter 11, certain claims against the Company in
existence prior to the filing of the petition for relief were stayed while the
Company continued business operations as debtor-in-possession. The Company
operated in this manner from September 5, 2003 through June 10, 2004 when a
final bankruptcy order was obtained. As a result of the bankruptcy
re-structuring, the Company will record credits for debt forgiveness of
approximately $15.6 million during the three months ended June 30, 2004.
Additionally, the Company recognized charges of approximately $7.7 million for
inventory reserves and patent impairments during the three months ended June 30,
2003. The company also cancelled all of its outstanding common and preferred
stock including warrants and options, and issued 9,997,195 new common shares on
June 30, 2004. The company will emerge from bankruptcy with approximately $0.6
million in unsecured liabilities, approximately $2.1 million in secured debt to
GE, approximately $7.4 million in deferred revenue. Additionally the China Group
converted $1.0 million of its $2.0 million DIP loan for 68.5%, or 6,850,000
common shares in the re-organized Company. The China Group can convert, at their
option, the remaining DIP financing for an additional 2,500,000 common shares.

         With the new revenues being generated from the China Transaction and
projected sales to other customers, management expects LaserSight's cash and
cash equivalent balances and funds from operations (which are principally the
result of sales and collection of accounts receivable) will be sufficient to
meet its anticipated operating cash requirements for the next several months.
This expectation is based upon assumptions regarding cash flows and results of
operations over the next several months and is subject to substantial
uncertainty and risks beyond our control. If these assumptions prove incorrect,
the duration of the time period during which LaserSight could continue
operations could be materially shorter. We continue to face liquidity and
capital resource issues relative to the timing of our accounts receivable
collection and the successful completion of new sales compared to our ongoing
payment obligations. To continue our operations, we will need to generate
increased revenues, collect them and reduce our expenditures relative to our
recent history. While we are working to achieve these improved results, we
cannot assure you that we will be able to generate increased revenues and
collections to offset required cash expenditures. We are currently unable to
borrow under our revolving credit facility.

         The risks and uncertainties regarding management's expectations are
also described under the heading "Risk Factors and Uncertainties--Financial and
Liquidity Risks."

         Our expectations regarding future working capital requirements and our
ability to continue operations are based on various factors and assumptions that
are subject to substantial uncertainty and risks beyond our control and no
assurances can be given that these expectations will prove correct. The
occurrence of adverse developments related to these risks and uncertainties or
others could result in LaserSight incurring unforeseen expenses, being unable to

                                 Page 20 of 38
<PAGE>

generate additional sales, to collect new and outstanding accounts receivable,
to control expected expenses and overhead, or to negotiate payment terms with
creditors, and we would likely be unable to continue operations. .

         We have actively sought additional funds through the possible sale of
certain company assets or through additional investment or loans, which would
provide temporary relief from our current liquidity pressures. We have sought a
strategic partner or buyer. Given the extent of those efforts and the publicity
about the China Group, it is unlikely that there will be any other buyer,
strategic partner or investor in the near future.

         On March 12, 2001, we established a $3.0 million term loan and $10.0
million revolving credit facility with GE. We borrowed $3.0 million under the
term loan at an annual rate equal to two and one-half percent (2.5%) above the
prime rate. Interest is payable monthly and the loan must be repaid on March 12,
2003. As of September 30, 2003, the outstanding principal on our term loan is
approximately $1.8 million. Under our credit facility, we had the option to
borrow amounts at an annual rate equal to one and one-quarter percent (1.25%)
above the prime rate for short-term working capital needs or such other purposes
as approved by GE. Borrowings were limited to 85% of eligible accounts
receivable related to U.S. sales. Eligible accounts receivable were to be
primarily based on future U.S. sales, which did not increase as a result of our
decision to not actively market our laser in the U.S. until we receive
additional FDA approvals. See "Industry and Competitive Risks--We do not intend
to continue actively marketing our LaserScan LSX laser system in the U.S. until
we received additional FDA approvals."

         Borrowings under the GE loans were secured by substantially all of the
Company's assets. The term loan and credit facility require us to meet certain
covenants, including the maintenance of a minimum net worth. The terms of the
loans originally extended to March 12, 2003. In addition to the costs and fees
associated with the transaction, we issued to GE a warrant to purchase 243,750
shares of common stock at an exercise price of $3.15 per share. The warrant was
to expire on March 12, 2004. On August 15, 2002, GE provided a waiver of our
prior defaults under our loan agreement pending the funding of the equity
portion of the NIMD transaction. Upon receipt of the equity investment in
October 2002, revised covenants became effective that decreased the required
minimum level of net worth to $2.1 million, decreased minimum tangible net worth
to negative $2.8 million and decreased required minimum quarterly revenues
during the last two quarters of 2002 and the first quarter of 2003. In exchange
for the waiver and revised covenants, the Company paid $150,000 in principal to
GE upon the receipt of the equity investment in October 2002 and agreed to
increase other monthly principal payments to $60,000 in October 2002 and to
$40,000 during each of November and December 2002 and January 2003, with the
remaining principal due on March 12, 2003.

         On March 12, 2003, our loan agreement with GE was extended by 30 days
from March 12, 2003 to April 11, 2003. On March 31, 2003, our loan agreement
with GE was amended again. In addition to the amendment, GE waived our failure
to comply with the net revenue covenant for the fourth quarter of 2002. In
exchange for the amendment and waiver, we paid approximately $9,250 in fees to
GE and agreed to increase our monthly principal payments to $45,000 beginning in
April 2003. Revised covenants became effective on March 31, 2003 that decreased
the minimum level of net worth to $1.0 million, minimum tangible net worth to
negative $4.0 million and minimum quarterly net revenue during 2003 to $2.0
million. We agreed to work in good faith with GE to adjust these covenants by
May 31, 2003 based on our first quarter 2003 financial results and our ongoing
efforts to obtain additional cash infusion. As discussed above, on June 20, 2003
the Company announced that it had been advised by GE that its loans were in
default due to an adverse material change in the financial condition and
business operations. The Company continued to negotiate with GE during June and
July of 2003, until a new agreement was executed on August 28, 2003 providing
for an extension of the loans through January 2005.

On August 30, 2004 the Company signed a three-year note expiring on June 30,
2007. The note bears interest of 9%. Certain covenants were modified as follows:
net worth of $750,000, tangible net worth of $1,000,000 and minimum quarterly
revenues of $1,000,000. GE was issued a warrant to purchase 100,000 shares of

                                 Page 21 of 38
<PAGE>

common stock at $0.25 per share, or $0.40 per share if NIIC converts their DIP
loan to equity. The warrant expires June 30, 2008.

         There can be no assurance as to the correctness of the other
assumptions underlying our business plan or our expectations regarding our
working capital requirements or our ability to continue operations.

         Our ability to continue operations is based on factors including the
success of our sales efforts in China and in other foreign countries where our
efforts will initially be primarily focused, increases in accounts receivable
and inventory purchases when sales increase, our present inability to borrow
under our revolving credit facility, the uncertain impact of the market
introduction of our AstraMax diagnostic workstations, and the absence of
unanticipated product development and marketing costs. See "Risk Factors and
Uncertainties--Industry and Competitive Risks--"


EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2002, the Financial Accounting Standards Board (FASB) issued
Statement No. 146 "Accounting for Costs Associated with Exit or Disposal
Activities." This statement nullifies EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits Restructuring." Statement
No. 146 requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred rather than the date of an
entity's commitment to an exit plan. We adopted Statement No. 146 on January 1,
2003. The adoption of Statement No. 146 did not have a material effect on our
consolidated financial statements. However, as a result of the Chapter 11
petition, the company will experience substantial re-organization expense and
upon completion of the Chapter 11 petition will experience substantial income
from the gain on debt discharge.

         In December 2002, the FASB issued Statement No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure - an amendment of FASB
Statement No. 123." Statement No. 148 amends Statement No. 123, "Accounting for
Stock-Based Compensation," to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-base
employee compensation. In addition, Statement No. 148 amends the disclosure
requirements of Statement No. 123 to require prominent disclosures in both
annual and interim financial statements. While we have not elected to adopt fair
value accounting for its stock-based compensation, we have complied with the new
disclosure requirements under Statement No. 148. As adopted, this statement does
not have a material impact on our consolidated financial statements. As stated
above, the Company canceled all of the outstanding common and preferred stock,
including options and warrants, outstanding as of September 30, 2003. As part of
the re-organization, the Company issued 9,997,195 new common shares on June 30,
2004.

         In November 2002, the FASB issued Interpretation No. 45 (FIN 45),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 clarifies the requirements
of SFAS No. 5, Accounting for Contingencies, relating to a guarantor's
accounting for, and disclosure of, the issuance of certain types of guarantees.
For certain guarantees issued after December 31, 2002, FIN 45 requires a
guarantor to recognize, upon issuance of a guarantee, a liability for the fair
value of the obligations it assumes under the guarantee. Guarantees issued prior
to January 1, 2003, are not subject to liability recognition, but are subject to
expanded disclosure requirements. This interpretation did not have a material
impact on our consolidated financial statements.

         In May 2003, the FASB issued Statement of Financial Accounting
Standards No. 150 (SFAS 150), "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity". SFAS 150 requires that certain
financial instruments, which under previous guidance were accounted for as
equity, must now be accounted for as liabilities. The financial instruments
affected include mandatory redeemable stock, certain financial instruments that
require or may require the issuer to buy back some of its shares in exchange for
cash or other assets and certain obligations that can be settled with shares of
stock. SFAS 150 is effective for all financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the

                                 Page 22 of 38
<PAGE>

first interim period beginning after June 15, 2003, although certain aspects
have been delayed pending further clarifications. We do not expect the adoption
of SFAS 150 to have a material impact on our financial position or results of
operations.

RISK FACTORS AND UNCERTAINTIES

         The business, results of operations and financial condition of
LaserSight and the market price of our common stock may be adversely affected by
a variety of factors, including the ones noted below:

FINANCIAL AND LIQUIDITY RISKS

         WE HAVE EXPERIENCED SIGNIFICANT LOSSES AND OPERATING CASH FLOW DEFICITS
AND WE HAVE LIMITED VISIBILITY AS IF FUTURE CASH FLOW DEFICITS WILL CONTINUE.

         We continue to be challenged by our significant liquidity and capital
resource issues relative to the timing of our accounts receivable collection and
the successful completion of new sales compared to our ongoing payment
obligations. Although the Chapter 11 re-organization in September of 2003 and
resultant re-structuring will relieve the Company of substantial debt, we need
to increase sales to the China group and to other customers, and/or decrease
expenses further before we will reach profitability or positive cash flow. Our
future working capital requirements and our ability to continue operations are
based on various factors and assumptions, which are subject to substantial
uncertainty and risks beyond our control and no assurances can be given that
these expectations will prove correct. The occurrence of adverse developments
related to these risks and uncertainties or others could result in LaserSight
being unable to generate additional sales or collect new and outstanding
accounts receivable. Any such adverse developments may also result in the
incurrence of unforeseen expenses or LaserSight being unable to control expected
expenses and overhead. If we fail to generate additional sales and collect new
and outstanding accounts receivable or incur unforeseen expenses or fail to
control our expected expenses and overhead, we will be unable to continue
operations in the absence of obtaining additional sources of capital.

         The timing of the conversion of our current assets into cash is not
totally in our control. For example, we cannot dictate the timing of the
collection of our accounts receivable with our customers and converting our
inventory into cash is dependent on our ability to generate new sales with our
products and collect the sales price in a timely manner. While to date we have
been able to negotiate payment terms with our suppliers and other creditors,
there is no assurance that we can continue to do so.

         We experienced significant net losses and deficits in cash flow from
operations for the years ended December 31, 2002, 2001 and for the nine months
ended September 30, 2003, as set forth in the following table. We cannot be
certain that we will be able to achieve or sustain profitability or positive
operating cash flow in the future.

<TABLE>
<CAPTION>
                                                                                 Nine months Ended
                                          Year Ended December 31,                   September 30,
                                          2001                 2002                     2003
                                          ----                 ----                     ----
<S>                                   <C>                 <C>                       <C>
Net loss                              $26.2 million        $13.6 million             $22.5 million

Deficit in cash flow from
operations                            $17.7 million         $2.7 million             $0.6 million

</TABLE>

         In the longer term, our expectations are based on additional factors
including: the success of our sales efforts in China where our efforts will
initially be primarily focused, increases in accounts receivable and inventory
purchases when sales increase, our present inability to borrow under our
revolving credit facility, AstraMax diagnostic workstations and AstraPro
diagnostic software, and the absence of unanticipated product development and
marketing costs. These factors and assumptions are subject to substantial

                                 Page 23 of 38
<PAGE>

uncertainty and risks beyond our control and no assurances can be given that
these expectations will prove correct. These risks and uncertainties include:

     o    the willingness of trade creditors to continue to extend credit to
          LaserSight;
     o    reductions and cancellations in orders;
     o    our ability to fulfill orders in light of our current financial
          condition;
     o    our ability to sell products and collect accounts receivables at or
          above the level of management's expectations;
     o    the occurrence of unforeseen expenses and our ability to control
          expected expenses and overhead;
     o    the occurrence of property and casualty losses which are uninsured or
          that generate insurance proceeds that cannot be collected in a short
          time frame;
     o    our ability to improve pricing and terms of international sales;
     o    the loss of, or failure to obtain additional, customers; and
     o    changes in pricing by our competitors.

         With respect to management's expectations regarding LaserSight's
ability to continue operations for the expected period and the risks and
uncertainties relating to those expectations, readers are encouraged to review
the discussions under the captions "--If our uncollectible receivables exceed
our reserves we will incur additional unanticipated expenses, and we may
experience difficulty collecting restructured receivables with extended payment
terms," "--Industry and Competitive Risks--" "--Additional Company and Business
Risks--Required per procedure fees payable to VISX under our license agreement
may exceed per procedure fees collected by us," and "--Our supply of certain
critical components and systems may be interrupted because of our reliance on a
limited number of suppliers." These risks and uncertainties can affect
LaserSight's ability to continue operations for the expected period in the
absence of obtaining additional capital resources. .

     IF WE FAIL TO MEET THE FINANCIAL COVENANTS IN OUR LOAN WITH GE, WE WILL NOT
HAVE ENOUGH AVAILABLE CASH TO PAY THE AMOUNT OWED.

Under the original terms of our term loan with GE, we were required to pay GE
approximately $2.1 million in March 2003. On March 12, 2003, the due date was
extended 30 days to April 11, 2003. On March 31, 2003, our loan agreement with
GE was amended again. In addition to the amendment, GE waived our failure to
comply with the net revenue covenant for the fourth quarter of 2002. In exchange
for the amendment and waiver, we paid approximately $9,250 in fees to GE, and we
had agreed to increase our monthly principal payments to $45,000 beginning in
April 2003. Revised covenants became effective that decreased the minimum level
of net worth to $1.0 million, minimum tangible net worth to negative $4.0
million and minimum quarterly net revenue during 2003 to $2.0 million. On June
20, 2003, the Company had been advised by GE that its loans to the Company were
in default due to an adverse material change in the financial condition and
business operations of the Company. The Company executed a new agreement with GE
on August 28, 2003 providing for an extension of its loans through January 2005.
On August 30, 2004 the Company signed a three-year note expiring on June 30,
2007. The note bears annual interest of 9%. Certain covenants were modified as
follows: net worth $750,000, tangible net worth $1,000,000 and minimum quarterly
revenues of $1,000,000. GE was issued a warrant to purchase 100,000 shares of
common stock at $0.25 per share, or $0.40 per share if the China Group converts
their DIP loan to equity. The warrant expires June 30, 2008.

         IF OUR UNCOLLECTIBLE RECEIVABLES EXCEED OUR RESERVES WE WILL INCUR
ADDITIONAL UNANTICIPATED EXPENSES, AND WE MAY EXPERIENCE DIFFICULTY COLLECTING
RESTRUCTURED RECEIVABLES WITH EXTENDED PAYMENT TERMS.

         Although we monitor the status of our receivables and maintain a
reserve for estimated losses, we cannot be certain that our reserves for
estimated losses, which were approximately $8.4 million at September 30, 2003,
will be sufficient to cover the amount of our actual write-offs over time. At
September 30, 2003, our net trade accounts and notes receivable totaled
approximately $8.6

                                 Page 24 of 38
<PAGE>

million. Actual write-offs that exceed amounts reserved could have a material
adverse effect on our consolidated financial condition and results of
operations. The amount of any loss that we may have to recognize in
connection with our inability to collect receivables is principally dependent on
our customers' ongoing financial condition, their ability to generate revenues
from our laser systems, and our ability to obtain and enforce legal judgments
against delinquent customers. As a result of the Chapter 11 filing on September
5, 2003, the Company lost the ability to vigorously collect on these accounts
receivable and accordingly further increased the reserves for estimated losses
as part of the re-structuring costs recorded in the second quarter. The portion
of the re-structuring costs attributable to our reserves for estimated losses
was approximately $3.6 million. Additionally, as a result of the Chapter 11
petition and resultant re-structuring, a significant portion of the
approximately $1.6 million of accrued commissions was eliminated. The Company
hired a collection agency in 2004 with no success.

         Our ability to evaluate the financial condition and revenue-generating
ability of our prospective customers located outside of the U.S. and our ability
to obtain and enforce legal judgments against customers located outside of the
U.S. is generally more limited than for our customers located in the U.S. Our
agreements with our international customers typically provide that the contracts
are governed by Florida law. We have not determined whether or to what extent
courts or administrative agencies located in foreign countries would enforce our
right to collect such receivables or to recover laser systems from customers in
the event of a customer's payment default. When a customer is not paying
according to established terms, we attempt to communicate and understand the
underlying causes and work with the customer to resolve any issues we can
control or influence. Since the September 5, 2003 bankruptcy petition, we have
been unable to resolve some customer's issues and were unable to collect our
receivable, either on the original schedule or under restructured terms. We
evaluate our legal and other alternatives based on existing facts and
circumstances. In most cases, we have concluded that the account should be
written off as uncollectible based on the economic condition in the region and
our understanding of the customer's business and related items. The reserves and
write-offs are generally the result of events and circumstances that could not
realistically be foreseen at the time sales were completed. In addition, during
our recent period of declining revenues, the relationship between the bad debts
that resulted from these events compared to lower revenues is magnified. Events
and circumstances that impact our bad debt expense include FDA approvals on our
laser system that took and are taking longer than anticipated, economic
downturns in certain countries or regions of the world, including the U.S. and
South and Central America, and the terrorist attacks that affected personal
spending decisions of consumers, and thus the business levels of many of our
customers.

         .
INDUSTRY AND COMPETITIVE RISKS

                  The following Industry and Competitive Risks relate primarily
         to the longer term.

         WE DO NOT INTEND TO CONTINUE ACTIVELY MARKETING OUR LASERSCAN LSX LASER
SYSTEM IN THE U.S. UNTIL WE RECEIVE ADDITIONAL FDA APPROVALS.

         We received the FDA approval necessary for the commercial marketing and
sale of our LaserScan LSX excimer laser system in the U.S. in late 1999 and
commercial shipments to customers in the U.S. began in March 2000. To date, our
LaserScan LSX laser system and per procedure fee business model have not
achieved a level of market acceptance sufficient to provide our cash flows from
operations to fund our business. Our excimer laser system has not been approved
by the FDA for use in the U.S. for as wide a range of treatments as have many of
our competitors' lasers. Because of the limited treatment ranges many physicians
have resisted purchasing our excimer laser. As a result of our current liquidity
and capital resource issues, we have decided to focus on international markets,
primarily China, with our LaserScan LSX laser system and other select
international markets with a custom ablation product line, and not to continue
actively marketing our laser system in the U.S.

The current level of per procedure fees payable to us by existing refractive
surgeon customers in the U.S. may not continue to be accepted by the marketplace
or may exceed those charged by our competitors. If our competitors reduce or do

                                 Page 25 of 38
<PAGE>

not charge per procedure fees to users of their systems, we could be forced to
reduce or eliminate the fees charged under this business model, which could
significantly reduce our revenues. We are not aware of the existence of a
current trend toward reducing or eliminating per procedure fees. In the spring
of 2000 industry leader VISX reduced the per-procedure fees it was charging the
users of its laser system, and shortly thereafter, Alcon announced that it too
would be reducing its licensing fee. Since that time, to our knowledge there has
been no trend to further reduce or eliminate per procedure fees. See also
"--Additional Company and Business Risks--Required per procedure fees payable to
VISX under our license agreement may exceed per procedure fees collected by us."

         WE HAVE DISCONTINUED OUR KERATOME PRODUCTS MARKETING.

         Keratomes are surgical devices used to create a corneal flap needed to
perform a laser vision correction procedure called Laser In-Situ Keratomileusis,
or LASIK. Once the corneal flapped is created, it is then flipped back, the
excimer laser beam is directed to the exposed corneal surface, and the flap is
placed back and re-adhered to the surface of the eye.

         In light of our lack of successful commercially introducing or
achieving broad market acceptance of our UltraShaper durable keratome or our
other keratome products, the Company elected to discontinue this product line in
September of 2003 as part of the re-focus of the business to core products.
Prior Sales of the keratome products were not significant. As a result the
Company has record substantial additions to its inventory reserves
as part of its re-structuring costs. As of June 30, 2003 the Company added an
additional amount of approximately $3.7 million to such inventory reserves. See
also "--Additional Company and Business Risks--Required minimum payments under
our keratome license agreement may exceed our gross profits from sales of our
keratome products."


         THE VISION CORRECTION INDUSTRY CURRENTLY CONSISTS OF A FEW ESTABLISHED
PROVIDERS WITH SIGNIFICANT MARKET SHARES AND WE ARE ENCOUNTERING DIFFICULTIES
COMPETING IN THIS HIGHLY COMPETITIVE ENVIRONMENT.

         The vision correction industry is subject to intense, increasing
competition, and we do not know if we will be able to compete successfully
against our current and future competitors. Many of our competitors have
established products, distribution capabilities and customer service networks in
the U.S. marketplace, are substantially larger and have greater brand
recognition and greater financial and other resources than we do. VISX, the
historical industry leader for excimer laser system sales in the U.S., sold
laser systems that performed a significant majority of the laser vision
correction procedures performed in the U.S. from 1999 through 2003. Similarly,
Bausch & Lomb sold a significant majority of the keratomes used by refractive
surgeons in the U.S. from 1999 through 2003. Alcon, one of the largest
ophthalmic companies in the world, and its narrow beam laser technology platform
also competes directly with our precision beam, scanning microspot LaserScan LSX
excimer laser system. In addition, Alcon, as a result of its acquisition of
Summit Autonomous Inc., is able to sell its narrow beam laser systems under a
royalty-free license to certain VISX patents without incurring the expense and
uncertainty associated with intellectual property litigation with VISX. Alcon
also has the ability to leverage the sale of its laser systems with its other
ophthalmic products, and has placed a significant number of its lasers systems
in the U.S. Competitors are using our weak financial condition as a reason why a
buyer shouldn't buy our laser.


         MANY OF OUR COMPETITORS RECEIVED EARLIER REGULATORY APPROVALS THAN US
AND MAY HAVE A COMPETITIVE ADVANTAGE OVER US DUE TO THE SUBSEQUENT EXPANSION OF
THEIR REGULATORY APPROVALS AND THEIR SUBSTANTIAL EXPERIENCE IN THE U.S. MARKET.


         We received the FDA approval necessary for the commercial sale of our
LaserScan LSX excimer laser system in the U.S. in November 1999 and commercial
shipments to customers in the U.S. began in March 2000. Our direct competitors
include large corporations such as VISX and Alcon, each of whom received FDA

                                 Page 26 of 38
<PAGE>

approval of excimer laser systems more than three years prior to our approval
and has substantial experience manufacturing, marketing and servicing laser
systems in the U.S. In addition to VISX and Alcon, Nidek, WaveLight and Bausch &
Lomb have also received FDA approval for their laser systems.

         In the U.S., a manufacturer of excimer laser vision correction systems
gains a competitive advantage by having its systems approved by the FDA for a
wider range of treatments for refractive errors such as nearsightedness,
farsightedness or astigmatism. A laser that has been approved for a wider range
of treatments is more attractive because it enlarges the pool of laser
correction candidates to whom laser correction procedures can be marketed.
Initial FDA approvals of excimer laser vision correction systems historically
have been limited to the treatment of low to moderate nearsightedness, with
additional approvals for other and broader treatments granted only as a result
of subsequent FDA applications and clinical trials. The range of treatments is
generally described in terms of diopters. The term diopter is used to describe
the measure of severity of the particular refractive error, and the greater the
number expressed in terms of diopters, the more severe the refractive error. In
addition, diopters that are expressed as a negative number represent the
severity of nearsightedness and diopters that are expressed as a positive number
reflect the severity of farsightedness.

         Our LaserScan LSX is currently approved in the US for the LASIK
treatment of nearsightedness with and without astigmatism for a range of
treatment of refractive errors up to -6.0 diopters MRSE with or without a
refractive astigmatism up to 4.5 diopters and for the Photorefractive
Keratectomy, or PRK, treatment of low to moderate nearsightedness (up to -6.0
diopters) without astigmatism. In PRK, the refractive surgeon prepares the eye
by gently removing the surface layer of the cornea called the epithelium. The
surgeon then applies the excimer laser beam directly to the corneal surface
reshaping the curvature of the cornea. Additionally, we have received FDA
approval to operate our laser systems at a repetition rate of 300 pulses per
second, three times the originally approved rate. We do not intend to sell our
laser systems in the U.S. until future cash flows permit us to file FDA
supplements. VISX and Alcon have received FDA approval, in 2001 and 2000,
respectively, for the treatment of moderate levels of farsightedness with or
without astigmatism and VISX received approval for the treatment of mixed
astigmatism in 2001.

         Currently, the excimer laser vision correction systems manufactured by
VISX, Alcon, Bausch & Lomb and Nidek have been approved for higher levels of
nearsightedness than the LaserScan LSX. Alcon's Apex Plus and Ladarvision
Excimer Laser Workstations, VISX's Star S2 Excimer Laser System and Nidek's
EC-5000 Excimer Laser System have received FDA approval for the LASIK treatment
of nearsightedness with or without astigmatism. The approvals for many of the
systems are for the correction of nearsightedness in the range of 0 diopters to
-14.0 diopters and nearsightedness with astigmatism generally in the range of
-0.5 diopters to -5.0 diopters. Bausch & Lomb's Technolas 217 excimer laser has
also received FDA approval for the treatment of nearsightedness from -1.0
diopter up to -11.0 diopters with up to -3.0 diopters of astigmatism. The VISX
and Alcon excimer laser systems are also approved for the treatment of moderate
farsightedness. In September 2000, the FDA approved Alcon's Ladarvision system
for the correction of farsightedness, using LASIK, of up to +6.0 diopters and an
astigmatism range of up to 6.0 diopters. In October 2000, the FDA approved
VISX's Star S2 and S3 systems for the correction using PRK of farsightedness of
up to +5.0 diopters and an astigmatism range of up to 3.0 diopters. In February
2001, the FDA approved of VISX's Custom-Contoured Ablation Pattern Method for
treatment of decentered ablations under a Humanitarian Device Exemption (HDE).
An HDE authorizes the use and marketing of a device that is intended to benefit
patients in the treatment of conditions that affect fewer than 4,000
individuals. In August 2002, Alcon announced the approval of its
wavefront-guided laser eye surgery application for the treatment of
nearsightedness between zero and -7.0 diopters. Competitors' earlier receipt of
LASIK and farsightedness-specific FDA regulatory approvals have given them a
significant competitive advantage that have impeded our ability to successfully
sell our LaserScan LSX system in the U.S.

                                 Page 27 of 38
<PAGE>

         WE DEPEND UPON OUR ABILITY TO ESTABLISH AND MAINTAIN STRATEGIC
RELATIONSHIPS.

         We believe that our ability to establish and maintain strategic
relationships will have a significant impact on our ability to meet our business
objectives. These strategic relationships are critical to our future success
because we believe that these relationships will help us to:

         o    extend the reach of our products to a larger number of refractive
              surgeons;
         o    develop and deploy new products;
         o    further enhance the LaserSight brand; and
         o    generate additional revenue.

         Entering into strategic relationships is complicated because some of
our current and future strategic partners may decide to compete with us in some
or all of our markets. In addition, we may not be able to establish
relationships with key participants in our industry if they have relationships
with our competitors, or if we have relationships with their competitors.
Moreover, some potential strategic partners have resisted, and may continue to
resist, working with us until our products and services have achieved widespread
market acceptance. Once we have established strategic relationships, we will
depend on our partners' ability to generate increased acceptance and use of our
products and services. To date, we have established only a limited number of
strategic relationships, and many of these relationships are in the early stages
of development. There can be no assurance as to the terms, timing or
consummation of any future strategic relationships. If we lose any of these
strategic relationships or fail to establish additional relationships, or if our
strategic relationships fail to benefit us as expected, we may not be able to
execute our business plan, and our business will suffer.

         BECAUSE THE SALE OF OUR PRODUCTS IS DEPENDENT ON THE CONTINUED MARKET
ACCEPTANCE OF LASER-BASED REFRACTIVE EYE SURGERY USING THE LASIK PROCEDURE, THE
LACK OF BROAD MARKET ACCEPTANCE WOULD HURT OUR BUSINESS.

         We believe that whether we achieve profitability and growth will
depend, in part, upon the continued acceptance of laser vision correction using
the LASIK procedure in China, the U.S. and in other countries. We believe that
if we achieve profitability and growth as a result of our focus in China, we can
increase our level of activity in the U.S. and other countries. We cannot be
certain that laser vision correction will continue to be accepted by either the
refractive surgeons or the public at large as an alternative to existing methods
of treating refractive vision disorders. The acceptance of laser vision
correction and, specifically, the LASIK procedure may be adversely affected by:

         o    possible concerns relating to safety and efficacy, including the
              predictability, stability and quality of results;
         o    the public's general resistance to surgery;
         o    the effectiveness and lower cost of alternative methods of
              correcting refractive vision disorders;
         o    the lack of long-term follow-up data;
         o    the possibility of unknown side effects;
         o    the lack of third-party reimbursement for the procedures;
         o    the cost of the procedure; and
         o    unfavorable publicity involving patient outcomes from the use of
              laser vision correction.

         Unfavorable side effects and potential complications that may result
from the use of laser vision correction systems manufactured by any manufacturer
may broadly affect market acceptance of laser-based vision correction surgery.
Potential patients may not distinguish between our precision beam scanning spot
technology and the laser technology incorporated by our competitors in their
laser systems, and customers may not differentiate laser systems and procedures
that have not received FDA approval from FDA-approved systems and procedures.
Any adverse consequences resulting from procedures performed with a competitor's

                                 Page 28 of 38
<PAGE>

systems or an unapproved laser system could adversely affect consumer acceptance
of laser vision correction in general. In addition, because laser vision
correction is an elective procedure that is not typically covered by insurance
and involves more significant immediate expense than eyeglasses or contact
lenses, adverse changes in the U.S. or international economy may cause consumers
to reassess their spending choices and to select lower-cost alternatives for
their vision correction needs. Any such shift in spending patterns could reduce
the volume of LASIK procedures performed that would, in turn, reduce the number
of laser systems sold and our revenues from per procedure fees.

         The failure of laser vision correction to achieve continued market
acceptance would limit our ability to market our products which in turn would
limit our ability to generate revenues from the sale of our products. If we are
unable to generate revenue from the sale of our products, we may not be able to
continue our business operations, even if laser vision correction achieves and
sustains market acceptance.

         NEW PRODUCTS OR TECHNOLOGIES COULD ERODE DEMAND FOR OUR PRODUCTS OR
MAKE THEM OBSOLETE, AND OUR BUSINESS COULD BE HARMED IF WE CANNOT KEEP PACE WITH
ADVANCES IN TECHNOLOGY.

         In addition to competing with eyeglasses and contact lenses, excimer
laser vision correction competes or may compete with newer technologies such as
intraocular lenses, intracorneal inlays, corneal rings and surgical techniques
using different or more advanced types of lasers. Two products that may become
competitive within the near term are implantable contact lenses and corneal
rings, which have been approved by the FDA. Both of these products require
procedures with lens implants, and their ultimate market acceptance is unknown
at this time. To the extent that any of these or other new technologies are
perceived to be clinically superior or economically more attractive than
currently marketed excimer laser vision correction procedures or techniques,
they could erode demand for our excimer laser, and cause a reduction in selling
prices of such products or render such products obsolete. In addition, if one or
more competing technologies achieves broader market acceptance or renders laser
vision correction procedures obsolete, our ability to generate revenues form the
sale of our products would be limited. If we are unable to generate revenue from
the sale of our products, we may not be able to continue our business
operations.

         As is typical in the case of new and rapidly evolving industries, the
demand and market for recently introduced products and technologies is
uncertain, and we cannot be certain that our LaserScan LSX laser system or
future new products and enhancements will be accepted in the marketplace. In
addition, announcements or the anticipation of announcements of new products,
whether for sale in the near future or at some later date, may cause customers
to defer purchasing our existing products.

         If we cannot adapt to changing technologies, our products may become
obsolete, and our business could suffer. Our success will depend, in part, on
our ability to continue to enhance our existing products, develop new technology
that addresses the increasingly sophisticated needs of our customers, license
leading technologies and respond to technological advances and emerging industry
standards and practices on a timely and cost-effective basis. The development of
our proprietary technology entails significant technical and business risks. We
may not be successful in using new technologies effectively or adapting our
proprietary technology to evolving customer requirements or emerging industry
standards.

ADDITIONAL COMPANY AND BUSINESS RISKS

         The following Additional Company and Business Risks relate primarily to
the longer term.

         THE LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS.

         Our ability to maintain our competitive position depends in part upon
the continued contributions of our executive officers and other key employees. A
loss of one or more such officers or key employees would result in a diversion
of financial and human resources in connection with recruiting and retaining a
replacement for such officers or key employees. Such a diversion of resources

                                 Page 29 of 38
<PAGE>

could prevent us from successfully executing our business plan, and our business
will suffer. We do not carry "key person" life insurance on any officer or key
employee.

         During 2001 we reduced our staff by 59 positions representing
approximately $2.5 million in annual salaries and wages. During 2002, we further
reduced our staff by an additional 46 positions representing approximately $2.5
million in annual salaries and wages. During the summer of 2003 the Company
further reduced our staff to 23 personnel. The resultant departures are
consistent with its overall reductions in positions and are not material to its
present operations. Our staff reductions may have a negative impact on our
ability to attract and retain personnel. If we fail to attract and retain
qualified individuals for necessary positions, we could be prevented from
successfully executing our business plan, and our business will suffer.

         Reduced staffing levels could impact our ability to provide customer
service and field support to our customers.

         WE HAVE MOVED ALL INTERNATIONAL MANUFACTURING OPERATIONS FROM COSTA
RICA TO THE U.S. AND MUST CONTINUE TO COMPLY WITH STRINGENT REGULATION OF OUR
MANUFACTURING OPERATIONS.

         We moved the manufacturing location of our laser systems for sale in
international markets to our U.S. location from our manufacturing facility in
Costa Rica in 2002. We cannot assure you that we will not encounter difficulties
in increasing our production capacity for our laser systems at our Florida
facility, including problems involving production delays, quality control or
assurance, component supply and lack of qualified personnel. Any products
manufactured or distributed by us pursuant to FDA clearances or approvals are
subject to extensive regulation by the FDA, including record-keeping
requirements and reporting of adverse experience with the use of the product.
Our manufacturing facilities are subject to periodic inspection by the FDA,
certain state agencies and international regulatory agencies. We require that
our key suppliers comply with recognized standards as well as our own quality
standards, and we regularly test the components and sub-assemblies supplied to
us. Any failure by us or our suppliers to comply with applicable regulatory
requirements, including the FDA's quality systems/good manufacturing practice
(QSR/GMP) regulations, could cause production and distribution of our products
to be delayed or prohibited, either of which could impair our ability to
generate revenues form the sale of our products. If we are unable to generate
revenues from the sale of our products we may not be able to continue our
business operations.

         REQUIRED PER PROCEDURE FEES PAYABLE TO VISX UNDER OUR LICENSE AGREEMENT
MAY EXCEED PER PROCEDURE FEES COLLECTED BY US.

         In addition to the risk that our refractive lasers will not be accepted
in the marketplace, we are required to pay VISX a royalty for each procedure
performed in the U.S. using our refractive lasers. The required per procedure
fees we are required to pay to VISX may exceed the per procedure fees we are
able to charge and/or collect from refractive surgeons. If the per procedure
fees we are required to pay to VISX exceed the per procedure fees we are able to
charge and/or collect from refractive surgeons, we would have to pay the VISX
per procedure fees out of our limited available cash reserves. During the year
2002 and through September 30,2003, the per procedure fees we are required to
pay VISX did not exceed per procedure fees collected by us.


         OUR FAILURE TO TIMELY OBTAIN OR EXPAND REGULATORY APPROVALS FOR OUR
PRODUCTS AND TO COMPLY WITH REGULATORY REQUIREMENTS COULD ADVERSELY AFFECT OUR
BUSINESS.

         Our excimer laser systems, diagnostic and custom ablation products are
subject to strict governmental regulations that materially affect our ability to
manufacture and market these products and directly impact our overall business
prospects. FDA regulations impose design and performance standards, labeling and
reporting requirements, and submission conditions in advance of marketing for
all medical laser products in the U.S. New product introductions, expanded
treatment types and levels for approved products, and significant design or
manufacturing modifications require a premarket clearance or approval by the FDA
prior to commercialization in the U.S. The FDA approval process, which is

                                 Page 30 of 38
<PAGE>

lengthy and uncertain, requires supporting clinical studies and substantial
commitments of financial and management resources. Failure to obtain or maintain
regulatory approvals and clearances in the U.S. and other countries, or
significant delays in obtaining these approvals and clearances, could prevent us
from marketing our products for either approved or expanded indications or
treatments, which could substantially decrease our future revenues.

         Additionally, product and procedure labeling and all forms of
promotional activities are subject to examination by the FDA, and current FDA
enforcement policy prohibits the marketing by manufacturers of approved medical
devices for unapproved uses. Noncompliance with these requirements may result in
warning letters, fines, injunctions, recall or seizure of products, suspension
of manufacturing, denial or withdrawal of PMAs, and criminal prosecution. Laser
products marketed in foreign countries are often subject to local laws governing
health product development processes, which may impose additional costs for
overseas product development. Future legislative or administrative requirements,
in the U.S. or elsewhere, may adversely affect our ability to obtain or retain
regulatory approval for our products. The failure to obtain approvals for new or
additional uses on a timely basis could prevent us from generating revenues from
the sale of our products, and if we are unable to generate revenues from the
sale of our products we may not be able to continue our business operations.
Accordingly, the Company has re-focused its marketing effort to the
international market, primarily China.


            OUR BUSINESS DEPENDS ON OUR INTELLECTUAL PROPERTY RIGHTS, AND IF WE
ARE UNABLE TO PROTECT THEM, OUR COMPETITIVE POSITION MAY BE ADVERSELY AFFECTED.

         Our business plan is predicated on our proprietary systems and
technology, including our precision beam scanning microspot technology laser
systems. We protect our proprietary rights through a combination of patent,
trademark, trade secret and copyright law, confidentiality agreements and
technical measures. We generally enter into non-disclosure agreements with our
employees and consultants and limit access to our trade secrets and technology.
We cannot assure you that the steps we have taken will prevent misappropriation
of our intellectual property. Misappropriation of our intellectual property
would have a material adverse effect on our competitive position. In addition,
we may have to engage in litigation or other legal proceedings in the future to
enforce or protect our intellectual property rights or to defend against claims
of invalidity. These legal proceedings may consume considerable resources,
including management time and attention, which would be diverted from the
operation of our business, and the outcome of any such legal proceeding is
inherently uncertain.

         We are aware that certain competitors are developing products that may
potentially infringe patents owned or licensed exclusively by us. In order to
protect our rights in these patents, we may find it necessary to assert and
pursue infringement claims against such third parties. We could incur
substantial costs and diversion of management resources litigating such
infringement claims and we cannot assure you that we will be successful in
resolving such claims or that the resolution of any such dispute will be on
terms that are favorable to us. See "--Patent infringement allegations may
impair our ability to manufacture and market our products".


         PATENT INFRINGEMENT ALLEGATIONS MAY IMPAIR OUR ABILITY TO MANUFACTURE
AND MARKET OUR PRODUCTS.

         There are a number of U.S. and foreign patents covering methods and
apparatus for performing corneal surgery that we do not own or have the right to
use. If we were found to infringe a patent in a particular market, we and our
customers may be enjoined from manufacturing, marketing, selling and using the
infringing product in the market and may be liable for damages for any past
infringement of such rights. In order to continue using such rights, we would be
required to obtain a license, which may require us to make royalty, per
procedure or other fee payments. We cannot be certain if we or our customers
will be successful in securing licenses, or that if we obtain licenses, such
licenses will be available on acceptable terms. Alternatively, we might be
required to redesign the infringing aspects of these products. Any redesign
efforts that we undertake could be expensive and might require regulatory
review. Furthermore, the redesign efforts could delay the reintroduction of

                                 Page 31 of 38
<PAGE>

these products into certain markets, or may be so significant as to be
impractical. If redesign efforts were impractical, we could be prevented from
manufacturing and selling the infringing products. If we are prevented from
selling the infringing products we may not be able to continue our business
operations.

         Litigation involving patents is common in our industry. While we do not
believe our laser systems infringe on any valid and enforceable patents that we
do not own or have a license to, we cannot assure you that one or more of our
other competitors or other persons will not assert that our products infringe
their intellectual property, or that we will not in the future be deemed to
infringe one or more patents owned by them or some other party. We could incur
substantial costs and diversion of management resources defending any
infringement claims. Furthermore, a party making a claim against us could secure
a judgment awarding substantial damages, as well as injunctive or other
equitable relief that could effectively block our ability to market one or more
of our products. In addition, we cannot assure you that licenses for any
intellectual property of third parties that might be required for our products
will be available on commercially reasonable terms, or at all.

                  In February of 2003, an Italian court issued an order
restraining our LaserSight Technologies subsidiary from marketing our AstraPro
software at a trade show in Italy. This restraining order was issued in favor of
LIGI Tecnologie Medicali S.p.a. (LIGI), a distributor of our products, and
alleged that our AstraPro software product infringes certain European patents
owned by LIGI. We retained Italian legal counsel to defend us in this
litigation, and the Italian court revoked the restraining order and ruled that
LIGI must pay our attorney's fees in connection with our defense of the
restraining order. Our Italian legal counsel informed us that LIGI had filed a
motion for a permanent injunction. We believe that our AstraPro software does
not infringe the European Patents owned by LIGI. Since the Chapter 11 filing
does not apply to foreign courts, this action is still pending.

     WE ARE SUBJECT TO CERTAIN RISKS ASSOCIATED WITH OUR INTERNATIONAL SALES.

         Our international sales accounted for 97% and 83% of our total revenues
during the nine months ended September 30, 2003 and the year ended December 31,
2002, respectively. In the future, we expect that international sales,
especially to China, will represent a higher percentage of our total sales. We
are presently focusing our sales efforts on international sales in China.

         International sales of our products may be limited or disrupted by:

         o    the imposition of government controls;
         o    export license requirements;
         o    economic or political instability;
         o    trade restrictions;
         o    difficulties in obtaining or maintaining export licenses;
         o    health concerns in China and other areas
         o    changes in tariffs; and
         o    difficulties in staffing and managing international operations.

         Our sales have historically been and are expected to continue to be
denominated in U.S. dollars. The European Economic Union's conversion to a
common currency, the euro, is not expected to have a material impact on our
business. However, due to our significant export sales, we are subject to
exchange rate fluctuations in the U.S. dollar, which could increase the
effective price in local currencies of our products. This could result in
reduced sales, longer payment cycles and greater difficulty in collecting
receivables relating to our international sales.

                                 Page 32 of 38
<PAGE>

         OUR SUPPLY OF CERTAIN CRITICAL COMPONENTS AND SYSTEMS MAY BE
INTERRUPTED BECAUSE OF OUR RELIANCE ON A LIMITED NUMBER OF SUPPLIERS.

         We currently purchase certain components used in the production,
operation and maintenance of our laser systems from a limited number of
suppliers, and certain key components are provided by a single vendor. We do not
have long-term contracts with providers of some key laser system components,
including TUI Lasertechnik und Laserintegration GmbH, which currently is a
single source supplier for the laser heads used in our LaserScan LSX excimer
laser system. Currently, SensoMotoric Instruments GmbH, Teltow, Germany, is a
single source supplier for the eye tracker boards used in our excimer laser
systems. If any of our key suppliers ceases providing us with products of
acceptable quality and quantity at a competitive price and in a timely fashion,
we would have to locate and contract with a substitute supplier and, in some
cases, such substitute supplier would need to be qualified by the FDA. If
substitute suppliers cannot be located and qualified in a timely manner or could
not provide required products on commercially reasonable terms, our ability to
manufacture, sell and generate revenues from our products would be impaired.


         UNLAWFUL TAMPERING OF OUR SYSTEM CONFIGURATIONS COULD RESULT IN REDUCED
REVENUES AND ADDITIONAL EXPENSES.

         We include a procedure counting mechanism on LaserScan LSX lasers
manufactured for sale and use in the U.S. Users of our LaserScan LSX excimer
laser system could tamper with the software or hardware configuration of the
system so as to alter or eliminate the procedure counting mechanism that
facilitates the collection of per procedure fees. Unauthorized tampering with
our procedure counting mechanism by users could result in us being required to
pay per procedure fees to VISX that we were not able to collect from users. If
we are unable to prevent such tampering, our license agreement with VISX could
be terminated after all applicable notice and cure periods have expired.


         INADEQUACY OR UNAVAILABILITY OF INSURANCE MAY EXPOSE US TO SUBSTANTIAL
PRODUCT LIABILITY CLAIMS.

         Our business exposes us to potential product liability risks and
possible adverse publicity that are inherent in the development, testing,
manufacture, marketing and sale of medical devices for human use. These risks
increase with respect to our products that receive regulatory approval for
commercialization. We have agreed in the past, and we will likely agree in the
future, to indemnify certain medical institutions and personnel who conduct and
participate in our clinical studies. While we maintain product liability
insurance, we cannot be certain that any such liability will be covered by our
insurance or that damages will not exceed the limits of our coverage. Even if a
claim is covered by insurance, the costs of defending a product liability,
malpractice, negligence or other action, and the assessment of damages in excess
of insurance coverage limits in the event of a successful product liability
claim, may exceed the amount of our operating reserves. Further, product
liability insurance may not continue to be available, either at existing or
increased levels of coverage, on commercially reasonable terms.


COMMON STOCK RISKS

         VARIATIONS IN OUR SALES AND OPERATING RESULTS MAY CAUSE OUR STOCK PRICE
TO FLUCTUATE.

                                 Page 33 of 38
<PAGE>

         Our operating results have fluctuated in the past, and may continue to
fluctuate in the future, as a result of a variety of factors, many of which are
outside of our control. For example, historically a significant portion of our
laser system orders for a particular quarter have been received and shipped near
the end of the quarter. As a result, our operating results for any quarter often
depend on the timing of the receipt of orders and the subsequent shipment of our
laser systems. Other factors that may cause our operating results or stock price
to fluctuate include:

         o    our significant liquidity and capital resource issues;
         o    the addition or loss of significant customers;
         o    reductions, cancellations or fulfillment of major orders;
         o    changes in pricing by us or our competitors;
         o    timing of regulatory approvals and the introduction or delays in
              shipment of new products;
         o    the relative mix of our business; and
         o    increased competition.

         As a result of these fluctuations, we believe that period-to-period
comparisons of our operating results cannot be relied upon as indicators of
future performance. In some quarters our operating results may fall below the
expectations of securities analysts and investors due to any of the factors
described above or other uncertainties. As a result of the Chapter 11 petition,
the Company cancelled all outstanding common and preferred stock, including
options and warrants. New common stock of 9,997,195 shares was issued on June
30, 2004. The stock is presently trading on the "Pink Sheets" under the symbol
LRST.


         WE ARE NO LONGER LISTED ON NASDAQ SMALL CAP - NOW TRADED ON THE "PINK
SHEETS"; THE MARKET PRICE OF OUR COMMON STOCK MAY CONTINUE TO EXPERIENCE EXTREME
FLUCTUATIONS DUE TO MARKET CONDITIONS THAT ARE UNRELATED TO OUR OPERATING
PERFORMANCE.

         The stock market, and in particular the securities of technology
companies like us, could experience extreme price and volume fluctuations
unrelated to our operating performance. Our stock price has historically been
volatile. Factors such as announcements of technological innovations or new
products by us or our competitors, changes in domestic or foreign governmental
regulations or regulatory approval processes, developments or disputes relating
to patent or proprietary rights, public concern as to the safety and efficacy of
refractive vision correction procedures, and changes in reports and
recommendations of securities analysts, have and may continue to have a
significant impact on the market price of our common stock.

         Because of the lengthy period during which our common stock traded
below $1.00 per share, it no longer met the listing requirements for the NASDAQ
National Market and on August 15, 2002, NASDAQ approved our application to
transfer our listing to the NASDAQ Small Cap Market via an exception from the
minimum bid price requirement. While we failed to meet this requirement as of
February 10, 2003, we were granted a temporary exception from this standard
subject to meeting certain conditions. The exception required that on or before
April 15, 2003, we were to file a definitive proxy statement with the Securities
and Exchange Commission and NASDAQ evidencing our intent to seek shareholder
approval for the implementation of a reverse stock split. Other requirements
included that, on or before May 30, 2003, we demonstrate a closing bid price of
at least $1.00 per share and, immediately thereafter, a closing bid of at least
$1.00 per share for a minimum of ten consecutive trading days. NASDAQ could
require a minimum closing bid price of at least $1.00 for more than 10 days. In
addition, we must have been able to demonstrate compliance with the following
maintenance requirements for continued listing on the NASDAQ Small Cap Market:

         o    stockholders' equity of $2.5 million;
         o    at least 500,000 shares of common stock publicly held;
         o    market value of publicly held shares of at least $1.0 million;
         o    shareholders (round lot holders) of at least 300, and
         o    at least two registered and active market makers.


                                 Page 34 of 38
<PAGE>

         We asked for an extension to May 1, 2003 to file the definitive proxy.
On April 25, 2003, we again asked for a further extension. But because we did
not timely meet the requirements, our request for an extension was denied. As a
result, NASDAQ's Listing Qualification Panel determined that our securities
would be delisted from NASDAQ's Small Cap Market effective April 30, 2003. Our
common stock was then listed in the OTC-Bulletin Board. The Company failed to
file its second quarter SEC Form 10-Q due on August 14, 2003. The Company did
file a Form 12b-25 on August 14, 2003 advising that the Company would not file
the quarterly report timely.

         The Company traded on NASDAQ through April 29, 2003 as LASE and LASEC
(March 5, 2003 - April 29, 2003). On April 30, 2003 it commenced trading on OTC
Bulletin Board as LASE. The OTCBB symbol was changed on August 27, 2003 to LASEE
due to the late filing status of the company. The Company commenced trading on
the "Pink Sheets" on Sep 27, 2003 with the symbol LASEQ. (Q indicates
bankruptcy) This is a conditional listing due to the bankruptcy filing by the
company. As mentioned above, the existing common and preferred shares, including
options and warrants, we cancelled pursuant to the Company's re-organization
plan. New common shares of 9,997,195 were issued on June 30, 2004 and commenced
trading via the "Pink Sheets" under the symbol LRST.

         The delisting of our common stock from the NASDAQ Small Cap Stock
Market will result in decreased liquidity of our outstanding shares of common
stock (and a resulting inability of our stockholders to sell our common stock or
obtain accurate quotations as to their market value), and, consequently, will
reduce the price at which our shares trade. The delisting of our common stock
may also deter broker-dealers from making a market in or otherwise generating
interest in our common stock and may adversely affect our ability to attract
investors in our common stock. Furthermore, our ability to raise additional
capital may be severely impaired. As a result of these factors, the value of our
common stock may decline significantly, and our stockholders may lose some or
all of their investment in our common stock.

         As a result of the Chapter 11 petition, and subsequent re-structuring,
the China Group will initially control 6,850,000 or 68.5% of the newly issued
9,997,195 common shares. Under certain circumstances their control could
increase to approximately 75%.


RISKS RELATING TO INTANGIBLES

         AMORTIZATION AND CHARGES RELATING TO OUR SIGNIFICANT INTANGIBLE ASSETS
COULD ADVERSELY AFFECT OUR STOCK PRICE AND REPORTED NET INCOME OR LOSS.

Of our total assets at September 30, 2003, approximately $0.5 million, or 8%,
were intangible assets. Any reduction in net income or increase in net loss
resulting from the amortization of intangible assets resulting from future
acquisitions by us may have an adverse impact upon the market price of our
common stock. In addition, in the event of a sale of LaserSight or our assets,
we cannot be certain that the value of such intangible assets would be
recovered.

         In accordance with FASB Statement No. 144, we review intangible assets
for impairment whenever events or changes in circumstances, including a history
of operating or cash flow losses, indicate that the carrying amount of an asset
may not be recoverable. If we determine that an intangible asset is impaired, a
non-cash impairment charge would be recognized. Accordingly, the Company
believes the Chapter 11 petition has caused and impairment of the carrying
values of some of our intangibles. In that regard, during the second quarter of
2003, the Company recorded approximately $4.1 million of re-structuring losses
attributable to impairment of intangibles.

                                 Page 35 of 38
<PAGE>

OTHER RISKS

         THE FOLLOWING RELATES TO RISKS ON BOTH A SHORT AND LONGER-TERM BASIS:

      The risks described above are not the only risks facing LaserSight. There
may be additional risks and uncertainties not presently known to us or that we
have deemed immaterial, which could also negatively impact our business
operations. If any of the foregoing risks actually occur, it could have a
material adverse effect on our business, financial condition and results of
operations. In that event, the trading price of our common stock could further
decline, and you may lose all or part of your investment.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We believe that our exposure to market risk for changes in interest and
currency rates is not significant. Our investments are limited to highly liquid
instruments generally with maturities of three months or less. All of our
transactions with international customers and suppliers are denominated in U.S.
dollars.

ITEM 4.  CONTROLS AND PROCEDURES

                  The Company maintains disclosure controls and procedures that
                  are designed to ensure that information required to be
                  disclosed in our Exchange Act reports is recorded, processed,
                  summarized and reported within the time periods specified in
                  the Securities and Exchange Commission's rules and forms and
                  that such information is accumulated and communicated to our
                  management, including our Chief Executive Officer and Chief
                  Financial Officer, as appropriate, to allow for timely
                  decisions regarding required disclosure. In designing and
                  evaluating the disclosure controls and procedures, management
                  recognizes that any controls and procedures, no matter how
                  well designed and operated, can provide only reasonable
                  assurance of achieving the desired control objectives, and
                  management is required to apply its judgment in evaluating the
                  cost-benefit relationship of possible controls and procedures

                  We carry out a variety of on-going procedures, under the
                  supervision and with the participation of our management,
                  including our Chief Executive Officer and our Chief Financial
                  Officer, to evaluate the effectiveness of the design and
                  operation of our disclosure controls and procedures. While our
                  Chief Executive Officer and Chief Financial Officer were
                  unable to reach a conclusion regarding the effectiveness of
                  our disclosure controls and procedures as of September 30,
                  2003, they have concluded that such controls and procedures
                  are currently effective at the reasonable assurance level.

                   PART II - OTHER INFORMATION

ITEM 1    LEGAL PROCEEDING

                                 Page 36 of 38
<PAGE>

          Certain legal proceedings against LaserSight are described in Item 3
          (Legal Proceedings) of LaserSight's Form 10-K for the year ended
          December 31, 2002.

ITEM 2    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

          As discussed in Note 1 to the unaudited condensed consolidation
          financial statements, the Company and two of its subsidiaries filed
          voluntary petitions for relief under Chapter 11 of the Bankruptcy
          Code. As a result of this petition, the company canceled all common
          and preferred shares, including options and warrants. On June 30, 2004
          the Company issued 9,997,195 new common shares pursuant to the plan
          approved by the Bankruptcy Court.

ITEM 3    DEFAULTS UPON SENIOR SECURITIES

          As discussed in Note 1 to the unaudited condensed consolidation
          financial statements, the Company and two of its subsidiaries filed
          voluntary petitions for relief under Chapter 11 of the Bankruptcy
          Code. The Company has been in continuous negotiations with GE during
          the term of the bankruptcy and the Company signed a new note with GE
          on August 29, 2004 effective June 30, 2004.

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          Not applicable.

ITEM 5    OTHER INFORMATION

          Not applicable.

ITEM 6    EXHIBITS

          a) Exhibits

Exhibit
Number                                      Description
------    ----------------------------------------------------------------------

11        Statement of Computation of Loss Per Share (Included in Financial
          Statements in Item 1 hereof)
31.1      Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
31.2      Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)
32        Certifications of CEO and CFO Pursuant to Section 1350
99        Additional Exhibit

          b) Reports on Form 8-K

          On July 8, 2003, we filed a Current Report on Form 8-K describing our
          June 24, 2003 Press Release announcing that Francis E. O'Donnell, Jr.,
          M.D. and David Peroni had resigned from their positions as members of
          the Board of Directors and that Dr. O'Donnell had resigned as Chairman
          of the Company's Board of Directors. Xianding Weng had been elected
          Chairman of the Board. The Company also announced that Shenzhen New
          Industries would proceed with further purchase orders and will make
          efforts to provide necessary advance payments according to a schedule
          to be agreed upon between the parties. If LaserSight's operations
          proceeded substantially in accordance with its restructured business
          plan, Shenzhen New Industries had indicated that it intended to
          purchase additional LaserSight products above and beyond the $10
          million in product purchases previously agreed to.

          On August 22, 2003, we filed a Current Report on Form 8-K describing
          our press release dated August 22, 2003 announcing that Michael R.
          Farris, would no longer serve as the Company's Chief Executive Officer
          and President and as a Director. Danghui ("David") Liu, Ph. D., Vice
          President of Product Development and Technical Marketing, was named
          Interim CEO.

          On September 4, 2003, we filed a Current Report on Form 8-K describing
          our press release dated September 4, 2003 announcing that it has
          failed to timely file its second quarter SEC Form 10-Q due on August
          14, 2003. As a late filer, the Company had a fifth character "E" added

                                 Page 37 of 38
<PAGE>

          to its security trading symbol to denote securities delinquent in
          their required filings. Securities so denoted will be removed from the
          OTC Bulletin Board after the applicable 30-day grace period.

          On September 5, 2003, we filed a Current Report on Form 8-K describing
          our press release dated September 5, 2003 announcing that due to the
          Company's continued cash flow issues it was forced to file for Chapter
          11 bankruptcy protection in the United States Bankruptcy Court, Middle
          District of Florida, Orlando Division, LaserSight Incorporated, Case
          No. 03-10371-681.

          On September 12, 2003, we filed a Current Report on Form 8-K
          describing our press release dated September 12, 2003 announced that
          Mr. Richard R. Confessore would no longer serve as the Company's Chief
          Financial Officer and Corporate Secretary.




                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the undersigned have duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       LASERSIGHT INCORPORATED

Dated: March 22, 2005                  By:/s/ Danghui ("David") Liu
                                          -------------------------
                                           Danghui ("David") Liu
                                           Chief Executive Officer and President

Dated: March 22, 2005                  By:/s/ Dorothy M. Cipolla
                                          -------------------------
                                           Dorothy M. Cipolla
                                           Chief Financial Officer














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